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Firms active in institutional FX markets are preparing for increased volumes by investing in connectivity, aiming to gain a competitive edge and better navigate evolving liquidity fragmentation, a new report from Acuiti has found.
The study found that over eight in 10 respondents expect FX volumes to increase over the next 12 months. This anticipated increase in volumes comes as disruptive technologies are changing the landscape for firms in the market, creating both opportunities and challenges.
FX Trading in 2025: Growth Amid Fragmentation, AI and the Shift to Direct Connectivity, which was released today in association with Avelacom, is based on a survey of senior executives at 68 proprietary trading and sell-side firms that are active in FX markets.
The report explores the key trends that are currently driving change in institutional FX markets from the growing adoption of artificial intelligence to digital assets and ETFs.
AI and machine learning were expected to have the biggest impact on FX trading, bringing innovation to a range of areas from data analytics to algorithmic execution. Firms are also automating workflows and processes to mitigate the challenge of rising operational costs.
This innovation comes in the wake of the increased electronification of FX markets over the past five years, which is driving increased volumes and also changing approaches to connectivity.
The study found that cloud adoption for trading and connectivity infrastructure was gaining in popularity among institutional FX trading firms as they look to improve their processing power and scalability.
Another trend was firms taking greater ownership of their connectivity infrastructure. Over a quarter of firms that currently rely on third party platforms for liquidity sourcing are planning to take more control of connectivity and establish more direct access to venues, bypassing brokerage-led execution.
“FX markets have seen considerable growth in recent years and expectations of a sustained increase in volatility, driven by geopolitical tensions and uncertainty around tariffs, are fuelling anticipation of a new boost for trading volumes,” says Ross Lancaster, head of research at Acuiti. “Our survey found that firms are looking to capitalise on the opportunities that growth brings by taking greater control of their trading infrastructure leveraging advances in technology from AI to the cloud.”
“Given the volatility in global FX markets, it makes sense that FX traders are looking to have more control over their connectivity,” says Alexsey Larichev, CEO of Avelacom. “Direct connectivity, with low latencies, will also allow them to take advantage of the further growth they expect to see in FX volumes.”
Download full report here: https://www.acuiti.io/wp-content/uploads/2025/05/FX-Trading-in-2025.pdf
