Business | Banking
Currency trading explodes
Global market turmoil has triggered an explosion in the number of currency trades going through banks' dealing desks, but it's not all good news.
- Reuters
- Published: 00:04 November 24, 2008
London: Global market turmoil has triggered an explosion in the number of currency trades going through banks' dealing desks, but it's not all good news.
Years of steady increases in the amount of money pulsing through the $3.2 trillion-a-day foreign exchange market are coming to an end as some of the biggest players are running for cover by soaring market volatility.
Industry specialists, who confidently predicted average daily foreign exchange turnover would approach a record $4 trillion this year, are now adopting more conservative forecasts.
"There's been an increase in trading velocity but we've not seen a commensurate rise in total value, in fact the opposite," said Jonathan Butterfield, vice president of marketing and communications at FX settlement bank CLS.
London's position as the global hub of currency trading was cemented, with figures in April showing a one-third rise in daily turnover from the previous six months.
Industry specialists say banks are continuing to make money out of the currency business, which has been one of the few bright spots in otherwise ailing balance sheets.
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