UPDATE 1-March FX daily turnover hits $2.3 trln as virus fuels volatility - CLS

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LONDON, March 24 (Reuters) - The meltdown in financial
markets over the coronavirus has sparked a huge jump in foreign
exchange trading volumes, with average daily turnover so far in
March up 27% on February as volatility soared, CLS said on
Tuesday.
CLS, a major settler of trades in the foreign exchange
market, said in a statement that high average daily volumes seen
at the end of February had continued into March, with spot
volumes rising by more than 50%.
So far in March, average daily turnover has hit $2.3
trillion, CLS said. That compares with $1.8 trillion in February
and $1.86 trillion in March 2019.
CLS said February saw record daily volumes in trading of the
Korean won, the Singapore dollar and the Israeli shekel.
March has seen forex market volatility soaring to multi-year
highs as investors panicked over the economic impact of the
coronavirus.
The Deutsche Bank Currency Volatility Index .DBCVIX rose
to more than 16% last week, having traded near record lows of
below 5% in early February.
Major currency pairs such as dollar/yen and sterling/dollar
have regularly seen daily moves of more than 1%, while
currencies such as the Australian dollar and Norwegian crown
have seen dramatic, multi-percent tumbles.
Many emerging market currencies have sunk to record lows as
investors scrambled to buy dollars, the currency of choice for
money managers and companies in a major economic crisis.
Traders say reduced liquidity has also been a problem,
exacerbating the volatility in forex markets that has caught so
many investors off guard.
CLS's Head of Information Services Masami Johnstone said the
jump in March volumes included a rise of 55% in spot trading,
15% in FX swaps and 36% in forwards.
"This was against the backdrop of the increased market
volatility," she said in the statement.