Institutional FX trading increased significantly in August, with a near-8% uptick in activity among eFX traders. The data comes from FNG, which points out that, while August represents increased activity following a relatively slow July,  H1 2024 was very active on the whole. 

Finalto’s own data supports the trend, showing increased August FX volumes, against historic norms. 

Antony Parsons, Finalto’s Head of Liquidity, confirms that “in a historically quieter month, we have seen traders adjusting positions on the back of US economic data with the growing likelihood that interest rates will soon be cut. Stable relationships and constant communication with our LPs ensure we keep competitive, deep liquidity with tight spreads for our clients even during high volatile periods as we have seen in August.” 

Robust service, resilient infrastructure 

The need for reliable tech infrastructure and access to deep liquidity made itself eminently apparent over the past month, when the Bank of Japan surprised the markets with its hawkish stance. The subsequent unwinding of the Yen carry trade led to dramatically increased market volatility and short-term uncertainty.  

It is perhaps a salient lesson that predicting uncertainty is never certain. As Finalto’s Chief Market Analyst Neil Wilson has pointed out, the leveraged positions preceding the big unwind were dependent on a period of low volatility, “and because the strategies required low volatility, it took only some relatively minor news to rock the boat.” 

Parsons explained that Finalto’s proprietary software infrastructure ensures the company can navigate market shifts: “Having our own technology allows us to stay robust during any ‘surprise’ events and helps us act as a safe place for clients to do business.” 

For more information about finding the right liquidity provider for your business, see our succinct ‘Liquidity Explained’ guide. You can download your copy here.  

Simon Shear

Content Writer at Finalto

All opinions, news, research, analysis, prices or other information is provided as general market commentary and not as investment advice and all potential results discussed are not guaranteed to be achieved. The information may have been derived from publicly available sources, company reports, personal research, or surveys. Past performance is not indicative of future performance. Trading carries risk of capital loss. Service available to professional clients only.