The FX trading community is uneasy about how the new regulatory landscape will impact the world's largest and most liquid securities trading market, according to a Bloomberg Foreign Exchange survey.
Most FX participants are against having foreign exchange trades processed through exchanges or clearinghouses, according to the survey, which was conducted at a Bloomberg FX conference that hosted more than 300 portfolio managers, FX traders and FX sales executives. More than 80 percent of the respondents expressed concern about the impact of new regulations on their bottom lines, Bloomberg added.
"FX professionals are focused on everything from monetary policy and capital flows to revaluation and intervention," Tod Van Name, Bloomberg's global head of FX and economics said in a statement. "FX is facing a critical juncture and it's important that all perspectives be heard to understand how regulatory changes will impact the market, the industry, and all its participants."
The survey revealed that 71 percent of FX professionals believe currency risk is more important to them than it was a year ago, with 51 percent adding that such risk is "a lot" greater heading into 2011. The research also found that the FX trading community forecasts continued troubles for the Euro, with 66 percent predicting the EUR-USD will remain under 1.40 over the next year. Some 29 percent see the EUR-USD hovering between 1.20 and 1.30 through 2011.
On the other side of the equation, the FX professionals polled were nearly in unanimous agreement that the Yuan will continue to appreciate, Bloomberg said, adding that only 29 percent see the USD-CNY falling between 10 and 13 percent by the end of 2012.
Most market professionals foresee the U.S. Federal Reserve continuing to hold the target rate below 1 percent through 2011, the survey said. A clear majority also think it's unlikely that an inflationary climate will take hold before 2012, Bloomberg added.
As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio