Reuters.uk – Foreign exchange trading volumes rose in 2005, with increased turnover from asset managers, pension funds and retail traders making up for a lull in hedge fund activity, a surveyreleased on Monday showed.
Global currency trading volume reported to Greenwich Associates, rose almost 14 percent in 2005 from 2004, with funds making more cross-border investments and selecting currencies as an asset class in their own right.
“In 2004 hedge funds that were trading FX as a discrete asset class were the primary drivers of new trading growth,” said Greenwich Associates consultant Frank Feenstra.
“In 2005, however, our research suggests that increasing activity on the part of fund managers was responsible for a much larger share of the growth.”
Unlike equities or fixed income, currency trading does not take place in one location or exchange and conclusive data on turnover and volume are hard to come by.
The firm said average foreign exchange trading volumes among fund managers and pension funds increased almost 48 percent from 2004 to 2005, making up 20 percent of global trading volumes — up from 15 percent in 2005.
