Forex volumes on the rise again in Q2?

The average number of daily foreign exchange payment instructions rose in August from the previous month, data from FX settlement system CLS Bank showed on Friday. The average volume of payment instructions was 589,446, with an average value of $3.33 trillion in August. Volumes were up 3 percent from 572,214 in July, although the average value was down 0.3 percent from $3.34 trillion the previous month, it said.

Average foreign exchange volumes peaked at a record 727,934 last October, but hedge funds and some other Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term providers in the market had reined in activity due to ongoing financial turmoil.

This is an encouraging piece of information as we are overflown with news claiming that there is a major drop in institutional Forex volume. Biggest drop was recorded in the US, UK and Australia with Japan being not far behind.

Let's hope that as the economic crisis eases the volumes will start getting back on track and will even pick up.