Spot FX volume drops 10pct at CLS Group in October

FX settlement specialist CLS Group today reported that the executed volumes of currency trading on its platforms were notably down in October.

CLS Group

In particular, the average daily traded volume submitted to CLS was $1.92 trillion last month, down 5.4 percent month-over-month from $2.03 trillion in September 2022. Across a yearly timetable, however, the figure reflected an increase of 3 percent relative to October 2021’s $1.86 trillion.

CLS reported swaps volumes at $1.31 trillion in October 2022, down from $1.35 trillion in September 2022. Further, the figure was slightly higher year-over-year from a year ago.

In terms of CLS’ spot FX volume, the group has reported the figure at $488 billion in October 2022, down 9.8 percent from $541 billion in September. Additionally, the figure was higher 10 percent over a yearly basis from the $445 billion set in the previous year.

Although monthly comparisons are always vulnerable to short-term fluctuations, there was a longer-term trend of declining spot volumes. However, the curve of this decline seems to have flattened in recent months.

The weak performance was again pronounced across CLS forwards business, which yielded a figure of $129 billion last month. That was lower 6.5 percent over a monthly basis from $138 billion in September, but was up by 26 percent year-over-year from $102 billion in October 2021.

“In October 2022 we saw average daily traded volumes of USD1.93 trillion, an increase of 3% compared to October 2021. Over the same period, FX forward volumes were up noticeably by 26%, FX spot volumes increased by 10%, while FX swap volumes decreased by 1%,” said CLS’s Global Head of Product, Keith Tippell.

CLS Group, which provides risk mitigation and settlement services for FX dealers and institutions, has shifted its reporting methodology for FX data in 2018. The figures are now reported based on one side of FX transactions and only one of the four legs of FX swap trades, in line with BIS standards and Foreign Exchange Committee market reports, and thus it avoids double counting the total amount of trades.

The company, which was formed in 2002 to reduce FX settlement risks, recently has been keen to promote itself as a provider of innovative products, including post-trade risk management, aggregation, and netting solutions.