December’s total US forex client assets of $600 million down 6% for the year.
(Over-) regulation continues to take its toll in the US retail FX business. The CFTC’s just-released December data shows continued erosion of assets held by US retail FX traders at their brokers. This wasn’t a case of clients migrating from one broker to another. Virtually all US retail FX brokers lost client funds in December in the 1%-4% range (see chart below), save for FXDD and Interactive Brokers which has been running aggressive TV and online ad campaigns in the US.
At just over 600 million, US retail FX client assets are now down 6% from where they were at the beginning of the year, and 20% from start of 2012 levels. And this in a year where globally the forex industry had a very nice comeback in trading volumes — our Retail FX Volume Index shows that global volumes in 2013 were more than 20% above 2012.
2013 has also seen a decline in choice facing US traders, with two known brokers — FX Solutions and Alpari US — withdrawing from the US market. FXCM acquired Alpari US, while Gain Capital picked up FX Solutions’ US business, the US arm of UK spreadbetting firm City Index.