APAC Hours See Increased Liquidity for Certain Currency Pairs
The Australian Dollar (AUD) and US Dollar (USD) currency pair saw increased trade activity during APAC hours, according to a recent study by WMR. The study examined intraday liquidity across five APAC currency pairs: AUD/USD, USD/CNH, USD/JPY, NZD/USD, and USD/SGD. Results showed that the AUD/USD pair had the highest trade activity among the five pairs studied.
WMR's Intraday Spot Rate Benchmarks revealed a significant increase in liquidity for some currencies during APAC hours, particularly for USD/CNH and USD/SGD in the local afternoon. The study found that liquidity was often comparable to London 4pm for these currency pairs. However, at critical times such as month end or periods of high market uncertainty, the relative liquidity advantage of London 4pm increased.
The study's findings suggest that while APAC hours may have higher trade activity and tighter bid-ask spreads for some currencies, London 4pm remains a significant benchmark time for APAC currencies. This is particularly true during times of high market uncertainty or at the end of the month.