LONDON, Aug 8 (Reuters) – Average daily volumes on currency trading platforms run by Thomson Reuters jumped to the highest in more than a year as a spike in turnover in swaps and other derivatives more than offset a decline in spot trading activity.
Spot turnover has declined in recent months as falling market volatility has squelched trading appetite from large hedge funds and leveraged players who thrive on volatility.
Spot volumes fell to $88 billion in July from $93 billion in the previous month. Rival UK-based financial broker NEX Group , which includes EBS BrokerTec, also reported a 2 percent monthly decline in spot turnover to $81.6 billion in July.
But that has been more than offset by a jump in turnover in forwards, swaps, options and non-deliverable forwards which recorded volumes of $299 billion, its highest in 4-1/2 years.
As a result, total trades across TR platforms averaged $387 billion a day over the course of the month, its highest since June 2016 when volumes shot up after the results of Britain’s referendum on EU membership were announced on June 24.
Rising turnover in swaps and other derivatives have helped cement London’s position as the world’s biggest foreign exchange trading centre despite concerns about the impact of Britain’s exit from the European Union on the financial industry, according to data published last month.
Market watchers say spot trading volatility will likely remain low in August as volatility remained near record lows and due to the summer lull. (Reporting by Saikat Chatterjee; Editing by Alison Williams)