(Bloomberg) -- CME Group, the world’s largest regulated foreign-exchange marketplace, is launching a new spot currency trading platform aimed at providing better liquidity across a wider pool of currency pairs, connecting cash and futures markets. 

The ‘Spot+’ trading platform will be available for client testing in the second half of next year, and will give spot traders access to extra liquidity from the group’s currency futures trading business — a potential boost to volumes which have dried up as industry competition increases.

The product is aimed at complimenting CME’s existing EBS spot trading platform, the primary venue for trading the euro, Japanese yen and Swiss franc against the US dollar, by bridging the gap to the wider pool of liquidity CME’s FX futures business has across 40 currency pairs. 

“Spot+ will offer access to CME’s FX futures as if they were a tradable FX spot product,” Paul Houston, CME’s global head of FX products, told Bloomberg News in London.

Currency trading activity on CME’s EBS platform rebounded in November from a two-year low but remains at historically low levels, with volume down 17% year-over-year. Demand for CME’s FX futures and options has remained resilient, with the average daily volumes of contracts up 2% year-over-year in November.

The launch marks a key step in realigning CME’s FX products into one single unit, following its acquisition of EBS in 2018, Houston said.

Competition for FX spot trading volumes has ramped up over the past years, with platforms including Cboe’s FX Central and Deutsche Borse’s 360T, vying for a slice of the $7.5 trillion a day market, while large banks have increasingly turned to their own internal liquidity for currency risk hedges.

“Spot FX volumes have been challenged over the last five to 10 years, but the importance of primary venues in the FX market is still significant,” Houston said.

©2023 Bloomberg L.P.