Thursday, July 29, 2010

Forex market bounces back, nears $4 Trillion in daily trade

Forex trading grew rapidly within 6 months reaching a top record of $4trillion in daily trading volume based on the data provided by central banks. This record growth puts the foreign exchange market back on track after the global recession in 2009.

As reported by the Wall Street Journal, the main drivers behind the currency market's trading rebound are worries over the euro zone's sovereign-debt crisis and concern over the pace of the global economic recovery. These two things keep volatility high. This proves that the Forex market remains busy and lucrative despite economic woes around the world.

Currency trading in the London grew by 15% within the first few months of 2010 with a daily turnover of $1.75 trillion in April. Estimates from trading hubs of New York, Tokyo, Toronto and Sydney along with that of London averaged to $4.1. Financial analysts say that currency volumes increased due to "investors and companies move their exposure from the advanced economies of Europe and the U.S. toward Asia and emerging markets".

In the U.S., daily volume rose to $754 billion in April, up 11.8 percent from October 2009 and 43.1 percent from April 2009. While trading volume in Tokyo rose 15.8 percent in the year to April driven largely by increased margin trading.

Australian trade volume also expanded dramatically with a whopping 54% in April from a year earlier. The foreign exchange market is one of the country's principal source of income for the Australian government. The Australian Dollar or AUD is the fifth most traded currency in the Forex market in line with the USD, EUR, JPY and GBP.


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