With market uncertainty remaining at its peak Foreign Exchange traders were gifted with another cause for concern when one of the main FX inter-dealer platforms - Reuters 3000 suffered outage for a few hours on Tuesday. The System failure occurred at 1847 GMT and 2030 GMT.
Only a few weeks back Knight one of the largest Market Makers for US equities suffered a system outage which had sever consequences, the market maker suffered losses of $440 million.
The interbank FX market has been welcoming computerised systems since the 80's. Reuters was the first to launch its Dealing 2000-1, and then the enhanced version 2000-3. Reuters has been dominating the inter-dealer market alongside EBS. Banks use either platform dependent on the currencies they transact in. EBS is primarily for dollar and Euro transactions and Reuters is for commonwealth currencies.
The direct cause was not identified however a Reuters spokesperson said in an email; "We have identified the cause of this disruption in a third-party database and have made sure extra controls are in place to ensure there is no repeat of this occurrence," a spokesman for the company said in an email.
Unlike the flash crash markets faced little disturbance on Tuesday, alternative platforms like EBS were able to accept trades.
EBS faced an outage in 2009 when a network problem shut down the system for a few hours, consequently Reuters reported a large amount of volume for the affected period.
FX volumes have been considerably low in 2012, sparked by the Euro zone debt crisis and the thought of more quantitative easing.
On the Reuters system, the average daily volume traded in July was $130 billion, down from $143 billion in June, considerable lower then May's level of $154 billion. In the same month EBS reported $106.7 billion.
