Euronext’s FX ADV drops below $20 billion in August

abdelaziz Fathi

Pan-European exchange, Euronext has reported an 8.2 percent drop in the average daily volume on its spot foreign exchange market. The ADV figure stood at $19.66 billion in August 2022, which is down from July’s $21.4 billion.

Taking a year-over-year perspective, Euronext’s currency turnover was higher by 24 percent from $15.8 billion reported back in August 2021.

In terms of its aggregated monthly turnover, Euronext FX reported $450 billion, which is slightly higher from $452 billion that changed hands in the previous month.

Following the boom in activity seen at major FX trading venues in the first half of 2022, the institutional ECNs were in a sea of red over the last two months. Almost all institutional platforms reported double-digit drops in their monthly volumes.

Euronext, which operates stock and derivatives markets in countries such as France, the Netherlands and Belgium, also said its total derivatives trading was lower 8.6 percent. The figure was reported at 11.8 million contracts a day in August compared to 12.9 million in the month prior. It was also down -6.4 percent when weighed against 2021’s turnover of 12.63 million contacts.

Founded as a joint venture by the Swiss bank Credit Suisse and FX broker FXCM in 2012, Euronext FX (formerly FastMatch) provides an electronic currency trading platform  mostly for institutional clients such as banks, asset managers and hedge funds. The FX unit of the franco-dutch exchange operator operates an electronic communication network (ECN) for currency trading and has matching engines in New York, London, Tokyo, and Singapore.

FastMatch was acquired by Euronext in 2017 as part of the exchange’s strategy to diversify its top line and extend its proposition to an additional asset class.

Euronext, which operates the biggest pan-European exchange, reported last month that its second-quarter revenues improved to a record €374.7 million, up 14 percent from a year earlier.

On the FX business front, Euronext reported an average daily volume on its spot foreign exchange market at $23.6 billion for the Q2 2022, up 27 percent compared to $18.6 billion a year ago. The spot foreign exchange division yielded €7.3 million in revenues, up from €5.7 million in Q2 2021, reflecting higher trading volumes as FX markets recorded heightened volatility through the quarter.

Euronext FX franchise disappointed expectations in 2021 that were already heightened after the exchange posted record trading volumes that were more than double the figure it typically generated before the pandemic.

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