An article appearing July 30 on LeapRate.com reported a strong jump in retail Forex trading volume, which was up 3% for the month of June – the highest it’s been in 2012. LeapRate, a Forex research and advisory firm, uses a compilation of data collected from various FX brokerage firms to measure monthly and quarterly activity levels.
This aggregate data, referred to as Leaprate’s Retail FX Volume Index, showed an average daily Forex trading volume of $196 billion for the month of June (up $6B from May). The rising volume is attributed primarily to the return of volatility to the currency markets. As Europe’s crisis slowly reaches its denouement, volatility has really started making its ascent back into the markets.
Gerald Segal, Managing Director at LeapRate, reported that most of the volume growth has been taking place in emerging markets, primarily those of the Asia-Pacific region. This week, emerging-market stocks have continued rising with speculation that central banks will attempt to stimulate economic growth. By lessening the borrowing costs in Spain and Italy, investors wary of risk would likely be a bit more apt to look into emerging market investments.
Sources: LeapRate research, monthly and quarterly volume reports of various Forex ECNs and Forex brokerage firms.
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