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The foreign exchange (FX) market has started 2025 with a bang! February saw trading volumes surge across major financial hubs, defying the odds of a shorter trading month. With institutional players driving activity, volatility remained high, and average daily volumes (ADV) painted a picture of a market bursting with energy.
Institutional FX Trading Holds Strong
Institutional FX traders weren’t holding back in February, keeping the market alive with impressive volume growth. Despite fewer trading days, the demand for major currency pairs—mainly USD/JPY—remained strong, signaling active hedging and speculation in response to shifting economic conditions.
Asia and the U.S. Dominate FX Growth
Asian markets were at the forefront of this surge, with Japan’s Click 365, the Tokyo Financial Exchange’s (TFX) trading platform, recording a solid 5% month-on-month volume increase, reaching 1.8 million contracts. Even better, this marked a rare year-on-year increase of 1.6%, breaking months of downward trends.
- The platform’s average daily volume (ADV) climbed to 90,700 contracts.
- USD/JPY remained the star, making up nearly one-third of all trades with 506,300 contracts, up 2.5% from January.
Meanwhile, in the United States, Cboe FX saw total volumes dip slightly from $1.04 trillion in January to $960.8 billion in February—but this was only because February had two fewer trading days. Adjusted for this, the ADV hit an impressive $48 billion, the highest since August 2024.
Europe Sees a Similar Pattern
While total FX volumes in Europe slipped, rising ADV remained intact. Euronext FX’s Fastmatch continued its decline in total trading volume, falling to $589 billion from January’s $610 billion. Yet, the ADV still grew from $27.7 billion to $29.4 billion.
Germany’s 360T, owned by the country’s stock exchange, dropped its total FX volume from $760.8 billion in January to $677.8 billion in February. However, like in other regions, its ADV ticked from $33 billion to $33.9 billion, proving that traders were as active as ever.
What This Means for FX Traders
- The FX market is booming. Even with a shorter month, high activity levels have kept momentum strong.
- Asia and the U.S. led the charge – Platforms like Click 365 and Cboe FX posted impressive ADV growth, driven by strong USD/JPY demand.
- Europe stayed on trend – Despite lower total volumes, European ADV numbers tell a story of sustained engagement.
The takeaway? FX trading isn’t slowing down. The market is ripe for opportunities with institutional traders staying engaged, global volatility, and shifting economic dynamics. Buckle up—2025 is shaping to be an exciting year for forex!
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
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