Growth is slowing down for the first time in six years, according to a report prepared by analyst Sreekrishna Sankar.
Despite a widespread shift to electronic trading in the past decade and the emergence of technical platforms that cater to institutions, near-zero interest rates and fears of recession in many parts of world are causing banks and asset managers to pull back from foreign exchange trading.
The result: Volume is at $4.3 trillion a day this year, down from peak of $4.7 trillion in October, Celent says.
This remains above 2010 levels. But the only country where volumes are up is the United States, which is showing what Celent calls a “minimal increase.” All other parts of the world are showing a drop in volume from 2011.
Economic crises in Eurpe and elsewhere are slowing FX growth. The biggest drop is in spot markets, Celex said. That is where investors had begun to treat foreign currencies as a new asset class, representative of the strength of different economies.
http://www.tradersmagazine.com/news/institutions-pull-back-from-fx-trading-110369-1.html
