FX: Key market research findings
- Dynamic market structure drives the market
- North America dominates the market geographically
- Key vendors—Barclays, Citibank, Deutsche Bank, and JPMorgan Chase
Technavio’s market research analysts estimate the global FX market to grow at a CAGR of almost 7% between 2016 and 2020. The dynamic nature of the market structure is the primary driver for the market. There has been a considerable growth in the FX trading volumes owing to an increase in the number of participants in the FX market globally. The participants in the market include hedgers, speculators, and central banks. In 2015, North America dominated the global FX market by accounting for a market share of almost 65%. The market in this region is booming due to continuous trade monitoring and surveillance in the foreign exchange (FX) spot market in the area. The larger flow of capital from USD denominated assets is likely to boost growth in the FX market in North America during the forecast period.
The new market research report from Technavio presents a breakdown and analysis of the FX segments by counterparty.
“Advancements in technology is the latest trend in the market. Electronic technologies that help vendors and customers to incorporate liquidity aggregation and algorithmic trading are being introduced into the market. Such technologies enable enhanced interconnectivity between market participants and widened risk sharing, resulting in lower trading costs and faster trade execution. This rise in the incorporation of advanced technologies is boosting the market turnaround,” Bharath Kanniappan, Lead Analyst, Industrial Automation, Technavio Research.
In 2015, the reporting dealers segment accounted for around 40% of the market share to dominate the global FX market. Reporting dealers consist of banks and other financial firms that report their activities to monetary authorities or central banks. The adoption of trading strategies that use private information culled from customer trades by reporting dealers is expected to reflect positively on the global reporting dealers segment through 2020.
The key vendors in the global FX market include Barclays, Citibank, Deutsche Bank, and JPMorgan Chase. A large number of forex products are being traded in the market on a daily basis where the electronic trading has become a competitive element, which avoids the opaque risk-taking moves of the market participant. This will also strengthen the financial stability in the market by avoiding systemic risks and restoring the credibility of the system.
A more detailed analysis is available in the Technavio report, Global FX Market 2016-2020.
We can customize reports by other regions and specific segments upon request.
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