The foreign exchange (FX) market is preparing for a rise in
trading volumes. A new report by Acuiti, in partnership with Avelacom, shows
that 82% of surveyed firms expect spot FX activity to increase over the next
year.
The report surveyed 68 institutional firms, including banks,
brokers, and proprietary trading companies. Respondents were based in Europe,
the US, Asia-Pacific, the Middle East and Africa, and Latin America.
FX Turnover Rises amid Global Uncertainty
FX turnover has grown steadily over the past decade. The BIS
triennial survey shows OTC FX turnover rose from $5.3 trillion in 2016 to $7.5
trillion in 2022. FX swaps made up the largest share of this growth. Spot
trading volumes have also increased but at a slower pace.
Recent events, such as tariff tensions and geopolitical
uncertainty, have already pushed volumes higher. For example, CME Group’s EBS
Market processed $147 billion in daily spot FX volume on April 3, 2025. Other
platforms like CboeFX also posted record averages.
Cloud and Hybrid Infrastructure Trends
As market conditions remain volatile, many firms are
focusing on technology upgrades. About one-third set up their current server
infrastructure more than five years ago. These systems may not be ready to
handle a sharp increase in order flow.
Direct connectivity is becoming more popular. Over 25% of
firms relying on third-party liquidity platforms plan to switch to direct
market access. Many are also moving toward cloud-based infrastructure, though
on-premise and hybrid setups are still common.
You may find it interesting at FinanceMagnates.com: Prop
Trading Firms Optimistic for 2025, 64% Expect Above-Average Conditions.
AI and Machine Learning Drive Change
AI and machine learning are expected to play a major role,
with 51% of survey respondents saying these technologies will drive the most
important changes in the next three years. While 17% called them game-changing,
concerns remain over high implementation costs and the unclear value of some
third-party tools.
Operational costs were identified as the top barrier to
growth, especially for brokers and proprietary trading firms. These firms also
cited liquidity and competition from banks as major challenges.
Buy-side demand for data analytics tools is increasing.
Trade cost analysis (TCA) and similar tools are becoming more important due to
regulatory pressure and client expectations.
Emerging FX Trends Raise Industry Questions
Other emerging trends, like FX exchange-traded funds (ETFs)
and digital currencies, are being watched closely. However, most firms do not
yet view them as major disruptors. Only 16% believe FX ETFs will significantly
impact the market. A larger share, 28%, sees stablecoins and CBDCs as having
potential, but concerns remain about credit risks.
The report shows a market under pressure to grow.
Infrastructure, cost control, and direct access are now central themes. As
global trade uncertainty continues, FX firms are rethinking how to stay
efficient and competitive.
The foreign exchange (FX) market is preparing for a rise in
trading volumes. A new report by Acuiti, in partnership with Avelacom, shows
that 82% of surveyed firms expect spot FX activity to increase over the next
year.
The report surveyed 68 institutional firms, including banks,
brokers, and proprietary trading companies. Respondents were based in Europe,
the US, Asia-Pacific, the Middle East and Africa, and Latin America.
FX Turnover Rises amid Global Uncertainty
FX turnover has grown steadily over the past decade. The BIS
triennial survey shows OTC FX turnover rose from $5.3 trillion in 2016 to $7.5
trillion in 2022. FX swaps made up the largest share of this growth. Spot
trading volumes have also increased but at a slower pace.
Recent events, such as tariff tensions and geopolitical
uncertainty, have already pushed volumes higher. For example, CME Group’s EBS
Market processed $147 billion in daily spot FX volume on April 3, 2025. Other
platforms like CboeFX also posted record averages.
Cloud and Hybrid Infrastructure Trends
As market conditions remain volatile, many firms are
focusing on technology upgrades. About one-third set up their current server
infrastructure more than five years ago. These systems may not be ready to
handle a sharp increase in order flow.
Direct connectivity is becoming more popular. Over 25% of
firms relying on third-party liquidity platforms plan to switch to direct
market access. Many are also moving toward cloud-based infrastructure, though
on-premise and hybrid setups are still common.
You may find it interesting at FinanceMagnates.com: Prop
Trading Firms Optimistic for 2025, 64% Expect Above-Average Conditions.
AI and Machine Learning Drive Change
AI and machine learning are expected to play a major role,
with 51% of survey respondents saying these technologies will drive the most
important changes in the next three years. While 17% called them game-changing,
concerns remain over high implementation costs and the unclear value of some
third-party tools.
Operational costs were identified as the top barrier to
growth, especially for brokers and proprietary trading firms. These firms also
cited liquidity and competition from banks as major challenges.
Buy-side demand for data analytics tools is increasing.
Trade cost analysis (TCA) and similar tools are becoming more important due to
regulatory pressure and client expectations.
Emerging FX Trends Raise Industry Questions
Other emerging trends, like FX exchange-traded funds (ETFs)
and digital currencies, are being watched closely. However, most firms do not
yet view them as major disruptors. Only 16% believe FX ETFs will significantly
impact the market. A larger share, 28%, sees stablecoins and CBDCs as having
potential, but concerns remain about credit risks.
The report shows a market under pressure to grow.
Infrastructure, cost control, and direct access are now central themes. As
global trade uncertainty continues, FX firms are rethinking how to stay
efficient and competitive.
This post is originally published on FINANCEMAGNATES.
