Posted on 01 August 2009
Tags: Central Bank of Sweden, currency speculators, economic growth, Economic Outlook, Economic Policy, economics, economists, financial instruments, foreign exchange, foreign exchange market, Foreign Exchange Market Speculation, forex, free market philosophy, FX, FX market, Hedge funds, hedgers, interest rates, international agreements, noise traders, position traders, professional speculators, Speculation, traditional financial instruments, transferring risk, World Economy
There is a regular recurrence of controversy related to currency speculators and their effect on currency devaluations and national economies. Nevertheless, it has been argued by the economists including Milton Friedman that speculators ultimately are a stabilizing influence on the market and they are performing an important function and that is they are providing a market for hedgers and they are transferring risk from those people who don’t wish to bear it, to those who do. It is thought by other economists such as Joseph Stiglitz that this argument is based more on politics and a free market philosophy than on economics.
Main Professional Speculators
The main professional speculators are large hedge funds and other well capitalized "position traders". Individual traders could act as "noise traders", according to some economists, and a more destabilizing role can be played by them than larger and better informed actors.
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Posted on 31 July 2009
Tags: Bank for International Settlements, brokers, central banks, Chicago Mercantile Exchange, corporations, currencies, currency futures, currency speculators, currency trading, daily turnover, dealers, derivatives, Euromoney's annual FX Poll, exchange-traded FX, foreign exchange, foreign exchange market, foreign exchange market volume, foreign exchange trading, forex, fund management assets, FX, FX futures volume, global foreign exchange, global turnover, governments, Large banks, large international banks, London foreign exchange market, Market size and liquidity, market-maker, minimum trading size, most active traders account, most liquid financial markets, New York foreign exchange market, OTC market, other financial institutions, retail broker, retail traders, Tokyo foreign exchange market, Trade, trade of currencies, trading of FX derivative products, traditional transactions, UK
At present, one of the largest and most liquid financial markets in the world is the foreign exchange market. Large banks, central banks, currency speculators, corporations, governments, and other financial institutions are all included among its traders. There is a continuous growth in the average daily volume in the global foreign exchange and related markets.
It has been reported by the Bank for International Settlements that the daily turnover has been over US$ 3.2 trillion in April 2007 . Since then, we can see continuous growth in the market. According to Euromoney’s annual FX Poll, between 2007 and 2008 volumes grew a further 41% .
London as Global Center for Foreign Exchange
Out of the $3.98 trillion daily global turnover, in London trading has been accounted for around $1.36 trillion, or we can say that it is 34.1% of the total, and this makes London by far the global center for foreign exchange. In second place it is New York, as trading in New York is accounted for 16.6% and on third places we have Tokyo where the trading has been accounted for 6.0%. Moreover, $2.1 trillion was traded in derivatives in addition to “traditional” turnover.
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