Low market volatility, losing market share to smaller competitors.
Leading Forex ECNs ICAP-EBS and Thomson Reuters each reported depressed FX volume levels in April, reflecting a continued industry-wide slowdown due (mainly) to low volatility levels in FX rates.
ICAP-EBS reported FX volumes of $109.7 billion daily in April, down 11% month-on-month from March and down 26% year-on-year from April 2011. This is the fourth consecutive month for ICAP under $130 billion in FX volume, after not having a month below $140 billion dating back to 2010.
The decrease at Thomson Reuters was not as marked, with its reported $130 billion in April volume being 5% below March and 6% below April last year.
At ICAP-EBS, newly-appointed CEO Gil Mandelzis certainly has his work cut out for him, as he battles not just slow market conditions but also clearly the loss of business to smaller aggressive competitors such as FXall. Mandelzis joined ICAP in 2007 after his VC-backed software startup Traiana was acquired by ICAP for $247 million. Traiana provides post-trade processing for FX transactions, and has been a consistent bright spot at ICAP.
For more on the global FX market see the LeapRate-Dow Jones Forex Industry Report.