LONDON, Jan 20 (Reuters) - Average daily foreign exchange trading volumes rose 2.7% year-on-year in December, CLS said on Monday, with growth in swap volumes more than compensating for a drop in spot trading caused by a further suppression in currency market volatility.
CLS, a major settler of trades in the foreign exchange market, said in a statement that December's volumes rose to $1.6 trillion, up from $1.56 trillion recorded in December 2018.
"The pattern in the last month mirrored that seen throughout much of 2019: significant growth in FX swap activity, (9% compared to December 2018), partly offset by a decline in the spot market," said CLS's Head of Quantitative Research, Rob Franolic.
Very low volatility - or price swings - has been a feature in FX markets for the past few years, discouraging outright speculative trading in currency markets.
More central bank stimulus and a part-resolution in the U.S.-China trade war boosted investor sentiment at the end of 2019 but failed to move FX markets much. (Reporting by Tommy Reggiori Wilkes; Editing by Saikat Chatterjee)