Even during the last week of August and the height of summer vacation, volatility brings currency traders to the table. And to their screens.
The 20%+ drop in China’s equity markets during the last 10 days of the month – followed by a short-lived 10% recovery – was the major catalyst which rippled through equity, commodity and currency markets worldwide.
Leading equity markets saw glitches in execution. The nervous crude oil market dipped to multi-year lows. Major currency pairs popped up and down more than 1% daily.
A perfect storm. And trading volumes soared.
As a result, LeapRate’s Retail FX Volume Index rose 5% in August to hit $329 billion ADV, up from $312 billion in July. And the increase seems to be fairly consistent across most major geographies and products.
Gerald Segal, LeapRate Managing Director, commented:
The end of August provided the biggest sudden shock to financial markets since the January 15 Swiss Franc spike. But it appears as though Forex brokers got through this blip not only unscathed, but very profitably.
We believe that some Forex brokers had their best day(s) of 2015 during the last week of August. For Forex ECN Hotspot FX, Monday August 24 was indeed their second busiest day of the year, second only to January 15 itself.
Sources: LeapRate research, monthly and quarterly volume reports of various Forex ECNs and Forex brokerage firms.
The LeapRate Retail FX Volume Index is a monthly measure of activity, stated in billions of dollars per day. It is calculated using proprietary formulas developed by LeapRate. The data input into the model are based on examining monthly and/or quarterly activity levels put out by various retail FX brokerage firms; similar activity levels announced by other FX aggregators such as Forex ECNs (e.g. Thomson Reuters FXall, ICAP-EBS, Hotspot FX) and FX settlement firms (e.g. CLS Group); as well as anecdotal evidence we encounter as part of our general research activities in the Forex sector.
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