After a brief pause in volume growth in the late-1990s on the
back of the LTCM debt crisis and the advent of the euro, FX daily
trading volume has resumed its 'normal' growth rate. The movement
toward globalization of industry, the easy money investment
environment, massive growth in available investment capital, growth
in derivatives, and the stretch for alpha into new markets and
asset classes are pushing volumes in the FX marketplace to upwards
of $3 trillion in value per day.
Leader : Winds of Change in the Currency Markets: Evolution or Revolution?
Laurie BerkeSenior consultant with the TABB Group
Toto, this sure doesn't look like Kansas. The winds of change are
blowing - around the FX trading business. Will they carry market
efficiencies over the rainbow? Or…drop a house on a witch?
Part of that volume growth can be attributed to the arrival of a
new source of trading activity-financial markets investors trading
FX as an asset class who bring with them new tools and new demands.
Their arrival has seen a push for change in an OTC marketplace that
has historically had little in the way of pricing transparency and
no regulatory oversight. As this trend continues to progress, it
begs the question, "Can these financial industry players really
have an impact on such a massive, global, liquid, decentralized
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