Thomson Reuters’ FX Volumes Drop in July as Summer Lull Weighs

July FX volumes on Thomson Reuters' platforms outpaced those of last year, though turnover is still down month-over-month as the lack of clear direction in currency markets continues to affect daily trading activity.

FX trading volumes saw a significant drop last month, coming in at $398 billion, down 12 percent from $452 billion in June 2018, failing to match its strong comeback in the previous month.

However, Thomson Reuters’ total average daily volume (ADV) of its foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (FX) products, including spot, forwards, 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 options, and non-deliverable forwards (NDF), made a slight increase by 2.8 percent year-over-year from $387 billion in July 2017.

Following a bumpy period in geopolitics over the first quarter, trading activity rose strongly to $461 billion and $463 billion in March and February of this year respectively, the two best months on record for trading volumes.

In a month in which the dollar rose against a basket of currencies on the revival of the trade wars and expectations for US interest rate hikes, average volumes for spot trading declined to $94 billion in July 2018, down 14 percent from $103 billion in the month prior. On a year-on-year basis, spot turnover for July registered a seven percent increase from $88 billion a year ago.

Thomson Reuters’ figures reflect the trend observed in the monthly figures from many of the major trading platforms. However, given its position as a major trading hub for the wholesale market, the company provides one of the most comprehensive snapshots of activity.