SGX's Asian FX futures volume rose 44% in 2019

Asian FX futures recorded a total of $1.8t for the year.

Singapore Exchange’s Asian foreign exchange (FX) futures continued to grow, recording a total of $1.8t (US$1.3t) in 2019, a 44% rise in volume from $1.3t (US$914b) in 2018, announced SGX in a press release.

Aggregate open interest stood at $10.9b (US$7.89b) as at end December 2019, a 90% surge YoY. Trading volume for January 2020 was about $174.4b (US$126b) on a notional basis, with close to 2 million contracts traded.

SGX noted that the majority of the trading activity on SGX takes place during the overnight session, which runs from 1800 to 0445 Singapore time, covering US and European trading hours.

The growth in trading volumes during non-Asian hours has outpaced the growth during Asian hours. Trading volumes from international participants increased 60% YoY in 2019, contributing to about 27% of total currency volumes.

The heightened activity also comes as the FX industry moves toward the final stages of regulatory reforms for uncleared over-the-counter (OTC) derivatives.

With Uncleared Margin Rules (UMR) continuing to phase in this year and next, the FX industry is gradually moving towards centralised clearing to lower margin costs and capital requirements.

SGX continues to help OTC clients adopt centralised clearing via its FlexC FX Futures. The feature allows market participants to trade customisable FX futures in a bilateral OTC manner. Since its first pilot trade last year, SGX has cleared over $170.6m (US$123.2m) in FlexC FX trades.