Summer slowdown, or forex market shift?

We’ll actually attribute this one to the summer doldrums. After seeing a steady rise in trading volumes as 2013 progressed, culminating with its second-ever month for forex volumes in June, the CME Group reported that July FX volumes dropped by a whopping 33% to average 807 million contracts per day, down from more than 1.2 million in June.

On a year-to-year comparison, however, July volumes were up slightly (less than 1%) over last July.

Unlike when volumes were rising in previous months, when it boasted of record trading from this jurisdiction or that instrument, the CME didn’t give any explanation for the large drop-off. We’ll have to wait and see until after the summer, but our sense is that it was mainly the seasonally slow institutional market which caused the fall, not any sea change in forex trading interest out there.

We’ll see how the Forex ECNs and retail forex brokers report in the coming days, to determine if the slowdown at the CME was also present in the spot forex and retail forex markets. Stay tuned to LeapRate…

For the press release from the CME Group on July volumes click here.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.