The evolution of electronic currency trading. Since the establishment of electronic trading platforms the times in which currency trades were transacted by phone belong to the past. Today the majority of currency trading is performed online. This essay describes the fast evolution of the platforms since the turn of the millennium, the reasons for this development and explains why the expertise of FX-specialists still is indispensable.
The boom defies financial markets. The uncertainty that has been so evident on stock markets in recent weeks has so far not been reflected in any leading economic indicators. Inflation continues its slow rise. The normalization of monetary policy, in our view, is set to continue.
EM currencies in the spotlight. Given their higher yields, emerging markets currencies are typically strongly impacted by risk-on/risk-off trades, which can move their exchange rates well out of their PPP fair-value ranges. The recent developments in the ZAR, TRY, BRL and RUB are perfect examples of this.
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