LONDON Aug 8 Average daily volumes in the
global foreign exchange market dropped by almost 14 percent in
July, data from FX settlement system CLS showed, as traders took
their summer breaks and as volatility approached historic lows.
Volumes were the same as last July when volatility was twice
its current levels. As interest rates stay
low globally, crimping arbitrage between even the most liquid
currencies, traders have little incentive to take positions.
Daily currency trading volumes on one platform provider
-Thomson fell 11 percent month-on-month, the
company said on Friday.
The value of all transactions through the CLS system, which
is used almost universally by the banking industry to process or
settle trades, dropped to $4.71 trillion in July.
CLS noted that volumes from April to June rose 14 percent.
A survey by the Bank of England in July showed daily
currency trading in London, the world's largest foreign exchange
centre, rose 7 percent in the six months to April.
But a combination of ultra-low interest rates across the
developed world and an uncertain regulatory environment has
hammered spot trade volumes over the past year. The BoE said
spot volumes from October to April were down more than a fifth.
Spot trading on Thomson Reuters platforms - which includes
Thomson Reuters Matching and FXall - fell to $99 billion, its
lowest in at least 18 months. But overall, volumes were up 8
percent on the year at $344 billion.
Volumes at rival platform EBS fell by 8 percent from
a month ago to $70.6 billion, leaving them 21 percent below
where they were a year ago, and highlighting the troubles that
the interdealer broker has been facing.
(Editing by Louise Ireland)