FXall, a foreign exchange (FX) trading platform, has announced record annual trading volumes of over $13.4 trillion in 2007, representing a 37% year-on-year volume increase. In addition, daily volume on the platform surpassed $98 billion in the fourth quarter.
The firm says growth in trading volumes continues to be driven by new client activity, in particular from the investment community, which now accounts for over 50% of volume traded over FXall.
According to FXall, the record volumes coincide with the Bank for International Settlements (BIS) report released in December 2007, which highlights a number of drivers for FX market growth. Significant expansion has taken place in the dealer-to-customer market as buy-side and corporate participants capitalise on the value in the FX market for either hedging or investment purposes. Diversification by investors with a long-term vision, such as pension funds, and increasing turnover in emerging market currencies have all led to growth in trading volume in 2007, the company believes.
The growing role of algorithmic trading in the financial segment of the market, which accounted for half of the increase in total turnover over the past three years, is also seen as an important driver for rising volumes. The company adds that increasing focus on best execution and control and compliance has been a factor in the growth in trading volumes over FXall as institutional FX traders, including asset managers, banks, broker-dealers, hedge funds and corporations, embrace electronic trading as the execution method of choice.
“FX trading is a constantly evolving landscape, and with volumes continuing to rise there has been a sustained increase in demand for online platforms that offer a complete electronic solution,” says Phil Weisberg, CEO of FXall. “We look forward to ongoing growth in 2008 as we continue to meet the demands of increasingly complex participants and strategies.”