SGX FX futures hit record volume in August on macro uncertainties

TRADING activity in Singapore Exchange currency futures hit a record monthly volume of more than 2.6 million contracts traded in August, with an aggregate trading volume of US$143 million, boosted by macroeconomic volatility.

The boom represents a 22 per cent increase month-on-month, and 53 per cent year-on-year rise in the notional value traded in the month. This brings the total trading volume for 2019 thus far to US$870 billion, a substantial increase against the US$571 billion traded in 2018 during the same period.

The cumulative volume for SGX currency futures between Aug 2 and Aug 5 exceeded US$32 billion. In particular, the USD/CNH and INR/USD Futures recorded a surge in trading.

Trading of the SGX USD/CNH futures crossed US$96.5 billion in August, with the average daily volume at US$4.39 billion. This comes on the back of the Renminbi breaching 7 for the first time in a decade, as trade tensions spiked between the US and China over tariffs.

"The general momentum in trading of Renminbi futures at SGX has continued for a while - since May 6, trading has exceeded US$2 billion on every single day... and with four months still to go before the end of the year, year-to-date volumes have already exceeded US$603 billion against US$534 billion in full-year 2018," SGX noted in its market updates report.

Meanwhile, with the Indian rupee facing headwinds in August, the total trading volume for the SGX INR/USD futures grew to US$44.93 billion, with 1.6 million contracts in August.

This exceeds the previous high set in June 2018 at US$41.3 billion, on the back of 1.4 million contracts, and represents an on-year increase of 57 per cent. Trading exceeded US$2 billion on 14 days in August.