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I was looking at the USD/EUR exchange rates a few minutes ago (Saturday evening, Eastern Time Zone here in USA) at xe.com and noticed some sharp blips on it from earlier today.

The graph looked as shown below.

enter image description here

The times (on the X-axis) are in the GDT/UTC timezone but these fluctuations are from activity caused during Saturday. Notwithstanding that I assumed that the exchanges are closed on Saturday, the blips are interesting because the value after the blip is the same as before it.

Are these blips caused by

  1. some algorithmic trading happening during the weekends, or
  2. perhaps something in how xe.com calculates the currency rates, or
  3. something else?
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  • $\begingroup$ Probably not trading - if trading was happening the line wouldn't be flat at all $\endgroup$
    – Kontorus
    Jul 25 '16 at 20:45
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I’d go with (2j, something with how they calculate exchange rates. If you note the scale, the blips are abeolutely small, so there was just some small glitches.

I am only somewhat familiar with currencies, but the spot markets use market makers. (Currency futures are traded on exchanges, but the chart should be labelled as futures if that were the case.) Series like this are based on some kind of “average” of quotes. The period shown is outside “normal” trading hours (currency markets are global, so trading hours reflect that), and there is no reason to update quotes, so the level is mainly stable.

Any number of things could cause the small glitches. For example, if one of the dealers shuts down their system temporarily, it could move the average. Or there could have been some out-of-hours activity that caused one dealer to move quotes, and then snap back into line with the other dealers after the activity passed.

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