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Foreign Exchange

FX debate: Executive summary

FX debate: Alpha quest drives FX market growth

FX debate: Participants


• The FX market is being transformed as new players seeking alpha enter it to compensate for low returns elsewhere

Lower transaction costs as a result of IT innovation and the use of algorithmic trading mean that the quest for alpha in FX is more practicable

• Both active leveraged trading strategies and increased involvement from central banks as active asset managers in FX have boosted the markets

Emerging market currencies are playing a bigger role since the arrival of the euro shrank volumes, but liquidity risk is often overlooked

• Electronic trading is playing a growing role in run-of-the-mill transactions and this has opened opportunities for specialist services and advice to be offered over the telephone

• The changing character of the market has placed new demands for focus and relevance on FX research

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