Alright, so let’s dive into this article about SGX FX setting records in FX volumes. It seems like in 2024, things really started heating up in the FX markets due to some interest rate drama between the US Federal Reserve and the Bank of Japan. This led to a whopping 54% increase in FX volumes at SGX FX over the last 10 months of the financial year. The USD/CNH futures contract hit a peak in August as the yen carry trade was going wild. Fast forward to 2025, and we’re still seeing high volumes, especially with an 80% surge in USD/CNH volumes to $33.5 billion in early April. This all seems to be linked to trade tensions and general market uncertainty, which is becoming a common theme these days.
Growing trade volumes on SGX FX during stressful market times make sense, according to KC Lam, the global head of rates and FX at SGX FX. He mentions that during market stress, there’s usually a spike in trade volumes of the USD/CNH contract, which is a go-to for expressing FX risk. It’s interesting to note that about 40% of SGX FX volumes are traded during US and Europe hours, showing the global reach of the exchange. The USD/CNH contract at SGX FX is a key player in price discovery and formation, acting as a reflection of general FX market volatility in the region. Other futures contracts like the INR/USD and KRW/USD are also seeing significant growth, indicating a shift towards trusted exchanges like SGX FX in Asia’s FX trading landscape.
There seems to be a shift in how market participants approach FX trading, with many turning to exchanges like SGX FX for price and trend guidance. Despite OTC FX trading still dominating the scene, exchange-traded FX is gaining ground, with SGX FX playing a crucial role. Market participants, including large OTC players, are utilizing market data from exchanges for price formation and discovery purposes, highlighting the importance of exchanges in today’s FX trading environment. As SGX FX continues to grow its offering and clientele, it’s evident that the exchange is becoming a key player in the FX market, offering efficiency and cost-saving opportunities to market participants worldwide.
