Average daily volumes in the global foreign exchange market hit a record high in September, data from FX settlement system CLS showed on Tuesday, confirming signs of a pickup on the industry's biggest trading platforms. The value of all transactions through the CLS system, which is used almost universally by the banking industry to process or settle trades, rose to $5.94 trillion a day last month, around a trillion higher on the month and in comparison to September a year ago.
The company said it was the highest average in its 12-year history. The average daily volume submitted to CLS, combining the settlement and aggregation services, was 1,419,102 up 37 percent from 1,035,978 in August. Both Thomson Reuters and EBS, among the industry's biggest trading platforms, had already reported surges in volumes in the past month to reflect fully a recovery in market volatility fuelled by politics, the dollar's rally and monetary policy divergence between the United States and Europe.
Volatility, which tends to drive volumes higher by increasing the potential returns for traders from day-to-day activity, was at or around all-time lows for the first six months of this year, stemming activity among major dealers. But events ranging from Scotland's referendum on independence to surprise dovish messages from the Bank of England and European Central Bank on policy have spurred activity and volatility over the last month.
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