Institutionalforeign exchange volumes showed signs of stabilization in July 2025, with mostmajor trading platforms recording modest improvements compared to June'ssubdued activity, despite the US dollar touching its lowest levels since 2022during the month.Therecovery came as the greenback marked its first upward month after sixconsecutive months of declines, providing some relief to currency markets thathad been grappling with persistent weakness throughout the first half of theyear.Institutional FX VolumesStabilize in July Despite Dollar's Historic DeclineCboe FXvolumes climbed to $1.05 trillion in July from June's $1.01 trillion, thoughthe increase was primarily driven by additional trading days. With 23 tradingdays compared to 21 in June, average daily volumes actually declined to $45.6billion from $48.3 billion the previous month.Theyear-over-year comparison tells a different story. July 2024 saw Cboe handle $1trillion in total volumes with an ADV of $44.5 billion, suggesting currentactivity levels remain roughly in line with historical patterns despite thedollar's broader struggles.FXSpotStreamposted more encouraging numbers, with total ADV reaching $104.2 billioncompared to June's $99.8 billion. The platform's spot ADV hit $68.4 billion,while other products contributed $36 billion to the daily average.European ExchangesMaintain MomentumEuropeanplatforms showed more consistent strength. Euronext FX volumes dipped slightlyto $584.7 billion from June's $609.5 billion, but the decline was modest giventhe volatile currency environment. ADV fell to $25.8 billion from $27.7billion, reflecting the impact of additional trading days.360T,operated by Deutsche Börse Group, posted stronger results with total volumesreaching $768.6 billion, up from June's $711.7 billion. The platform's ADVclimbed to $33.4 billion from $33.9 billion, representing one of the morerobust performances among major institutional venues.Japanese Market ShowsSharp ContrastTheJapanese market painted a starkly different picture. Click 365 volumesplummeted to 1.41 million contracts in July, representing a dramatic declinefrom both monthly and yearly comparisons. ADV dropped to 61,391 contracts, down19.6% from June and a steep 48.6% below July 2024 levels.This markeda significant reversal from July 2024, when Click 365 had posted strong growthwith 2.75 million contracts and an ADV of 119,474 contracts. The currentweakness suggests Japanese institutional appetite for FX trading has cooledconsiderably amid ongoing market uncertainty.Market Context and OutlookJuly'sperformance reflects the complex dynamics facing currency markets. While thedollar's decline to 2022 lows initially seemed poised to drive volatility andtrading activity higher, institutional volumes have remained relativelycontained compared to the explosive growth seen during April's Trump-inducedmarket turbulence."Weare expecting a weaker U.S. dollar in the coming months. The recent budgetimplications, the inflationary effects of tariffs, and President Trump'scritical remarks towards Fed Chair Jerome Powell all suggest a negative outlookfor the U.S. economy for the remainder of the year,” said Jennifer Lee, SeniorEconomist at BMO Capital MarketsThedollar's first monthly gain in six months during July may signal a potentialturning point, though traders remain cautious about declaring an end to thegreenback's broader weakness. With ongoing geopolitical tensions and tradeuncertainties continuing to influence currency flows, institutional platformsare preparing for potentially higher volatility in the coming months.This article was written by Damian Chmiel at www.financemagnates.com.