Mixed News from CLS’ FX Volumes Report

As has been the case thus far with the July FX volume reports, the data from CLS is mixed, with the settlement service provider seeing volumes decline on a month-on-month basis, but increasing year-on-year.

Within the headline data there were also nuances, with what growth there was being driven by spot and, especially, outright forward products, while FX swaps – CLS’ biggest product set – fell back.

Overall the service settled average daily volume of $1.986 trillion, a 4% decline from June, but up 5.6% year-on-year. Within this, as noted, FX swaps ADV settled fell to $1.28 trillion, a 9.2% decline month-on-month, and barely changed year-on-year (up 0.1%). This is the first time in 2023 that FX swaps volume settled has dropped below the $1.3 trillion threshold at CLS.

The picture was much more positive in the other products, however, with spot activity rising to $491 billion per day – the second highest ADV since September 2022. This represents a3.2% month-on-month increase, as well as a 4.3% rise from July 2022.

The growth in outright forwards activity easily outstripped anything else, however, reinforcing data from the UK FX Joint Standing FX committee released last week, which showed the product enjoyed a resurgence during April 2023. CLS says it handled $215 billion per day in outright forwards in July, a 16.9% increase from June and up a massive 46.4% year-on-year. This also marks the first time CLS has handled in excess of $200 billion per day in outright forwards in its history.