FX volume drops 7pct at CLS Group in July 2022

abdelaziz Fathi

FX settlement specialist CLS Group today reported that the executed volumes of currency trading on its platforms were notably down in July.

CLS Group

In particular, the average daily traded volume submitted to CLS was $1.87 trillion last month, down -6 percent month-over-month from $1.98 trillion in June 2022. Across a yearly timetable, however, the figure reflected an increase of 7 percent relative to July 2021’s $1.74 trillion.

Following a period of wide-scale volatility and increased trading activity during the initial phase of the Russo-Ukrainian war, average daily traded volumes in CLSSettlement, a payment-versus-payment settlement service, have now stabilized at lower volumes as compared to the first quarter.

CLS reported swaps volumes at $1.26 trillion in July 2022, down from $1.34 trillion in June 2022. Further, the figure was slightly higher year-over-year from $1.24 trillion a year ago.

Russian invasion left financial markets jittery

In terms of CLS’ spot FX volume, the group has reported the figure at $471 billion in July 2022, down 6 percent from $502 billion in June. Additionally, the figure was higher 12 percent over a yearly basis from the $420 billion set in the previous year.

Although monthly comparisons are always vulnerable to short-term fluctuations, there was a longer-term trend of declining spot volumes. However, the curve of this decline seems to have flattened in recent months.

The weak performance was again pronounced across CLS forwards business, which yielded a figure of $140 billion last month. That was marginally higher over a monthly basis from $137 billion in June, and was also up by 66 percent year-over-year from $84 billion in July 2021.

CLS figures reflect the trend observed in the monthly figures from major trading platforms, which have seen record-breaking volumes in the first quarter before turning to suffer lackluster activity. But after several flat months, the latest metrics from major institutional FX platforms show the FX market has bounced back with slight jumps in daily trading volumes.

“In July 2022, we saw average daily traded volumes of USD1.88 trillion, an increase of 8% compared to July 2021. Over the same period, FX forward and spot volumes were up significantly – by 66% and 12%, respectively – while FX swap volumes were also up by 2%,” said CLS’s Global Head of Product, Keith Tippell.

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