Foreign exchange settlement provider CLS Group saw record volumes in March 2020 as investors flock to safe-haven currencies amid violent market swings on fears of a Coronavirus -fueled global recession.
The average daily traded volume submitted to CLS was $2.19 trillion in March 2020, up 21 percent month-over-month from $1.811 trillion in February 2020. Across a yearly timetable, the figure was up 18 percent relative to March 2019’s figure of $1.863 trillion.
CLS reported swaps volumes at $1.35 trillion in March 2020, up from $1.24 trillion in February 2020, a rise of 11 percent month-over-month. Additionally, the figure was higher by four percent year-over-year from $1.308 trillion a year ago.
Global FX swap volumes surged to nearly $3.2 trillion per day and now account for almost half of global FX trading, according to the Bank for International Settlements’ latest survey, mirroring a pick-up in the spot market and reflecting strong trends in OTC sectors.
“The multiple nationwide lockdowns had a significant impact on investor sentiment which led to sharp stock market movements in both directions. On Thursday 19 March 2020 we saw the highest CBOE Volatility Index (VIX) ever recorded at 82.69. As a result, the market saw significant demand for dollars as a safe haven. The exchange rates of those currencies that CLS settles against the dollar also experienced the most significant monthly movements of the last decade, an average absolute daily percentage change of 1.14%, almost double the previous monthly high,” CLS said in a statement.
Metrobank joins CLS
In terms of CLS’ spot FX volume, the group has reported the figure at $707 billion in March 2020, up 61 percent relative to $439 billion in the year prior. The figure was higher by 8.3 percent over a monthly basis from the $500 billion set in February.
Spot volumes were particularly noteworthy, with a monthly high of $985 billion on March 9, which was the sixth on the all-time list. The increased spot volumes continued throughout March, with five of the 50 largest all-time spot volumes occurring during the month. Of the majors, monthly records were seen across EUR/USD, USD/JPY, GBP/USD, USD/CHF, and USD/CAD, with only AUD/USD and NZD/USD, narrowly missing out.
The solid performance was again pronounced across CLS forwards business, which yielded a figure of $129 billion last month, up 29 percent over a monthly basis, and was also higher by 41 percent year-over-year from $116 billion in March 2019.
CLS Group, which provides risk mitigation and settlement services for FX dealers and institutions, has recently welcomed Metrobank as the first Philippine bank to access CLSSettlement as a third-party participant.
