Electronic trading proves irresistible

Some 90% of trading of spot currencies in the interbank FX market is expected to be done electronically by 2007, up from today’s level of 60%, according to new research. Boston-based research and consultancy firm Celent Communications also predicts that dealer-to-client volumes will be 70% electronically traded over the same period, up from 43% now. The inter-dealer spot market, which trades $301 billion a day, has historically had a higher adoption rate of electronic trading than the dealer-to-client market.

Bulge-bracket banks realized earlier on that technology could significantly reduce errors and improve efficiencies.