CLS’ FX ADTV Drops 5.6% to $1.77 Trillion in August, Rises 6% YoY

Average daily traded volumes (ADTV) on Continuous Linked Settlement (CLS), a New York-headquartered provider of settlement and aggregation services for the forex industry, dropped 5.6% to US$1.77 trillion in August.

In July, the ADTV touched $1.88 trillion, rising 8% year-over-year (YoY).

However, while the average forex volume declined month-on-month in August, it climbed 6% from the $1.68 trillion generated in August 2021.

These details are contained in the CLS FX trade volume report for August 2022 shared with Finance Magnates on Friday.

FX Market Breakdown

According to CLS, on a month-over-month basis, its forex swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term, spot and forward market volumes dropped 3%, 9% and 15%, respectively in August.

Year-over-year CLS' forex swaps remained flat, accounting for US$1.23 trillion of the total traded volumes.

On the other hand, while spot trade volume climbed 17% YoY, bringing in US$429 billion, the outright forward volume surged by 49%, contributing US$118 billion to the total traded volume.

“A year-on-year increase in overall volumes was not seen across all products,” CLS noted.

“Over the same [YoY] period, FX forward and spot volumes were both up noticeably by 49% and 17%, respectively, while FX swap volumes remained flat,” Keith Tippell, the Chief Product Officer of CLS, said.

In the spot market, traded volumes of currency pairs USD/JPY, USD/SGD and EUR/USD surged 56%, 49% and 23% year-over-year, respectively.

In terms of daily spot volumes, CLS said August 31st was the busiest day when US$606 billion changed hands.

The majority of major currency pair volumes peaked on this day, the forex settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term and aggregation service provider added.

Meanwhile, in March, CLS crossed the $2 trillion mark in terms of the average daily trading volume.

The provider’s ADTV climbed from $1.982 trillion in February to $2.125 trillion in March as demands across all of its forex instruments soared.

Furthermore, CLS Group reported a record $100 billion in average daily notional value of the net calculations on CLSNet for the month of August.

CLSNet is a bilateral payment netting calculation service that caters for buy and sell-side institutions, supporting 120 currencies.

It operates a centralized infrastructure for the institutions and provides a single common record of their net payment obligations.

Through this method, the service streamlines post-trade matching and netting processes.