Dollar Surge Fails to Boost Forex Trading as Volumes Hit Five-Month Low

Monday, 04/11/2024 | 07:34 GMT by Damian Chmiel
  • October 2024 saw significant dollar strength and euro weakness, yet institutional forex trading volumes declined.
  • Despite increased market volatility due to upcoming US elections, trading activity hit multi-month lows.
US Dollar

October was one of the strongest months for the dollar (and weakest for the euro) in over a year. Despite above-average volatility driven by the upcoming U.S. elections and interest rate expectations, spot foreign exchange (Forex) volumes showed no increased activity from institutional investors. In some cases, trading volumes fell to nearly five-month lows.

Dollar-Dominated October Failed to Boost FX Volumes

Click 365, the currency trading platform on the Tokyo Financial Exchange (TFX), recorded another month of declining trading volumes, shrinking 12% compared to September to 1.7 million contracts. Year-over-year, the decline was almost 17.5%, with average daily volume (ADV) at 74,200 contracts.

Source: Click 365
Source: Click 365

The steepest month-over-month declines were seen in trading on the popular USD/JPY pair, where depreciation reached 29.5%, with trading volume shrinking to 545,900 contracts.

ADV depreciation was also visible in the U.S. market and spot currency trading on the Cboe exchange. The indicator reached $42.8 billion, compared to $46.87 billion in September. However, October had two more trading days (23 vs. 21). As a result, total volume was slightly higher at $984.9 billion, though these are the lowest values since June, well below August's near-record $1.1 trillion.

For FXSpotStream, October brought a notable slowdown. Total ADV was $93.1 billion, the lowest since May 2024, with spot ADV at $66.8 billion, also the lowest in nearly six months.

Source: FXSpotStream
Source: FXSpotStream

Falling Euro Shows No Impact on FX Activity

In Europe, German stock exchange -owned 360T recorded another month of volume decline in October, sliding to $657.7 billion from $661 billion reported a month earlier. ADV consequently shrank to $28.6 billion, compared to $31.5 billion reported in September.

As for Euronext FX's Fastmatch, there was a slight rebound after a very weak September. Total volumes bounced to $602 billion after falling to $579 billion in the previous month. However, more trading days meant ADV performed worse, sliding from $28 billion to $26.5 billion.

Compared to last year's results, the values are significantly better. Euronext FX reported a total volume of just under $508 billion in October 2023, while 360T reported $586 billion.

The EUR/USD currency pair declined by 2.3% in October, marking its most significant drop since September 2023. Concurrently, the U.S. dollar rebounded from multi-month lows, experiencing one of its strongest rallies against a weighted basket of currencies since September 2022.

October was one of the strongest months for the dollar (and weakest for the euro) in over a year. Despite above-average volatility driven by the upcoming U.S. elections and interest rate expectations, spot foreign exchange (Forex) volumes showed no increased activity from institutional investors. In some cases, trading volumes fell to nearly five-month lows.

Dollar-Dominated October Failed to Boost FX Volumes

Click 365, the currency trading platform on the Tokyo Financial Exchange (TFX), recorded another month of declining trading volumes, shrinking 12% compared to September to 1.7 million contracts. Year-over-year, the decline was almost 17.5%, with average daily volume (ADV) at 74,200 contracts.

Source: Click 365
Source: Click 365

The steepest month-over-month declines were seen in trading on the popular USD/JPY pair, where depreciation reached 29.5%, with trading volume shrinking to 545,900 contracts.

ADV depreciation was also visible in the U.S. market and spot currency trading on the Cboe exchange. The indicator reached $42.8 billion, compared to $46.87 billion in September. However, October had two more trading days (23 vs. 21). As a result, total volume was slightly higher at $984.9 billion, though these are the lowest values since June, well below August's near-record $1.1 trillion.

For FXSpotStream, October brought a notable slowdown. Total ADV was $93.1 billion, the lowest since May 2024, with spot ADV at $66.8 billion, also the lowest in nearly six months.

Source: FXSpotStream
Source: FXSpotStream

Falling Euro Shows No Impact on FX Activity

In Europe, German stock exchange -owned 360T recorded another month of volume decline in October, sliding to $657.7 billion from $661 billion reported a month earlier. ADV consequently shrank to $28.6 billion, compared to $31.5 billion reported in September.

As for Euronext FX's Fastmatch, there was a slight rebound after a very weak September. Total volumes bounced to $602 billion after falling to $579 billion in the previous month. However, more trading days meant ADV performed worse, sliding from $28 billion to $26.5 billion.

Compared to last year's results, the values are significantly better. Euronext FX reported a total volume of just under $508 billion in October 2023, while 360T reported $586 billion.

The EUR/USD currency pair declined by 2.3% in October, marking its most significant drop since September 2023. Concurrently, the U.S. dollar rebounded from multi-month lows, experiencing one of its strongest rallies against a weighted basket of currencies since September 2022.

About the Author: Damian Chmiel
Damian Chmiel
  • 1976 Articles
  • 47 Followers
About the Author: Damian Chmiel
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
  • 1976 Articles
  • 47 Followers

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