FX Volumes make a big comeback in January, led by Japan, as a global “risk-on” trade brings back volatility.
LeapRate’s Retail FX Volume Index, sponsored by Leverate, spiked up 18% in January from December levels to $201 billion per day. January’s index figure was the highest we’ve seen since August 2011, and represented one of the busiest months for retail FX trading ever.
The increase brings a very nice start to the year following a 2012 year which many in the retail FX sector would like to forget, as more stringent regulations, combined with ultra-low volatility in the currency markets, led to a slowdown in FX trading worldwide during 2012 — especially in Japan and the U.S., two of the largest FX trading markets.
LeapRate’s Retail FX Volume Index is a monthly measure of global trading activity in the retail FX sector.
Sources: LeapRate research, monthly and quarterly volume reports of various Forex ECNs and Forex brokerage firms.
Gerald Segal, LeapRate Managing Director commented, “January really brought with it a perfect storm, in the positive sense, for retail FX brokers. Several factors led to the healthy January volume figures, which we understand are continuing into February, including:
- a major comeback of FX trading volumes in Japan, as Japan’s new government and its focus on weakening the Yen to foster the domestic economy has created the “Abe trade”, bringing back volatility to many of the key Yen currency pairs.
- a general “risk-on” trade movement in the equity markets has brought more cheeriness to investors, and more action to the currency markets as well.
“As we mentioned above, a lot of that positive sentiment from January has continued in to February, and at this point we expect February to be as good or better a month for the retail FX sector.”
The LeapRate Retail FX Volume Index, sponsored by Leverate, 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.
LeapRate is a leading research and information firm serving the global FX industry. Through its partnership with Dow Jones, LeapRate publishes the LeapRate-Dow Jones Forex Industry Report, a comprehensive review of the retail FX industry. Other LeapRate services include Best-of-the-Web FX Research and our daily FX Research email for traders, the Forex Yellow Pages, Forex Exec Search job listings, and our Approved List of regulated FX brokerage firms worldwide. For more information please see our website at www.leaprate.com.