DbFX.com, Deutsche Bank’s online retail foreign exchange trading platform, has reported a 37% increase in trading volumes globally in the first quarter of 2009 over the same period last year, as retail traders continued to favour FX over equities and bonds.
The Middle East was once again one of DbFX’s best performing regions. The firm reported a 501% increase in volumes across the region for the first quarter of 2009 compared to the first quarter of 2008. The euro/US dollar, pound/US dollar and US dollar/Japanese yen were the most popular currency pairs in the Middle East and trading volumes for these pairs represented 85%, 10% and 1% respectively of all Middle Eastern trading during the quarter.
The three pairs also made up over 75% of total global trades. The figures illustrate a continued move away from the carry trade – once one of the most favoured strategies employed by traders – with trading in the pound/Australian dollar, New Zealand dollar/US dollar and US dollar/Japanese yen down 81%, 74% and 28% respectively globally.
In the Middle East, this pattern was also seen with the US dollar/Japanese yen volume dropping by 65% quarter-on-quarter.
Betsy Waters, global director of DbFX.com, says: “From a trading perspective, the carry trade has been a staple of FX traders’ portfolios for some time and has brought many new entrants to the market. However, traders have begun moving to alternative strategies such as valuation trades – where investors seek out seemingly undervalued currencies – and such behaviour reflects a growing understanding and knowledge of the FX space, and the strategies that dominate it, by traders.
“There’s no doubting the growth of retail FX as an asset class over the past 12 months or so, and it’s encouraging to see this growth and development continue unabated. The Middle East continues to emerge as one of the fastest growing FX markets where investors are increasingly looking at FX as an attractive and alternative asset class,” Waters adds.