Deutsche Bank’s retail online currency trading platform dbFX benefited from tumbling equity prices in January as retail investors sought to optimise alternative asset classes.
The bank says the platform experienced its highest volumes of trading during January 2008 since its launch nearly two years ago.
Nearly half of all trades executed during January by retail investors were EUR/USD transactions, compared to an average of 15% in the three months prior to August’s credit crunch of 2007. In January, this trend peaked on 16 January where seven out of every 10 trades for the day were between the currency pair.
The bank says that immediately after the US Federal Reserve’s first interest rate cut announcement of 75 base points on 22 January, the dollar lost ground against the euro and the euro/USD currency pair accounted for 40% of trading during the day after, and nearly 50% during 24 January.
As a result of the Fed’s cut, next day’s trading of the Japanese yen was down against the world’s other major currencies, most notably against the euro where volumes were slashed by half to just 8% of daily trading volumes.
Trading of the Japanese yen against the US dollar continued to decline and accounted for less than 10% of January’s total volume on dbFX, down nearly half against the previous month’s figures.
dbFX, which launched in the spring of 2006, has 32 currency pairs available to investors on its platform. It is available in multiple languages and accessible in over 70 countries.
Catherine Hardiman, head of dbFX EMEA says, "As the world observed tumbling equity prices during January 2008, investors sought to optimise alternative asset classes where they could make money and FX presented such an opportunity.
"January’s market conditions meant that investors turned to a ‘flight to quality’ around their currency trading. dbFX’s trading platform provides simple functionality and easy access to market information that enable investors to leverage market conditions in real-time at the touch of a button."