Foreign Exchange Bucks Declining Turnover Trend
Byline: Natasha de Teran
The foreign exchange sector of the derivatives market has bucked its long-term decline in turnover on the back of recent currency volatility and changes in some of the big currency crosses.Investment banks and brokerages have recorded record trading volumes, not seen since the introduction of the single European currency, in the past few months.
According to Michel Everaert, head of product marketing at GFI, one of the leading interdealer brokerages, with a strong franchise in fx options, the company has witnessed unusually high trading across the spectrum of currency crosses.
A small number of investment banks have reversed their policy of reducing the number of forex staff, and renewed hiring efforts to meet the new spate of investor interest.
Last week, Deutsche Bank announced the appointment of Bilal Hafeez as a senior FX strategist within its research team, at the same time as Bank of America hired more than a dozen bankers for its global foreign exchange franchise.
Deutsche's Hafeez is to concentrate on the near-term area of the market which has seen a particular pick-up in trading interest as a result of the recent volatility.
Hafeez is working with the fx trading and research desk at Deutsche, developing new analytical tools and indicators to build on the growing focus of activity in the short term.
Bank of America's new hires will be working across the spectrum of the forex markets, and will be based in London, New York, Hong Kong and Tokyo.
According to Ken Reich, global head of fx sales at Deutsche Bank, the renewed trading interest in the forex market dates back to the beginning of the second quarter of this year when the long-term US-dollar trend began to reverse itself.
As well as the traditional interbank activity and corporate hedging interest, a sizeable amount of the new flow is said to be coming from traditional money managers. …