Shrinking currency trade likely to bring jobs cull
"The drop in volumes in the market has impacted everyone, every bank on the street," said George Athanasopoulos, who co-heads global foreign exchange and precious metals at UBS. A global economic slowdown has helped to dampen volumes for some time, along with ultra-low interest rates in many countries which have dimmed the appeal of buying one major currency against another.
European Central Bank President Mario Draghi seems, probably unintentionally, to have accelerated the trend when he promised in late July to do "whatever it takes to preserve the euro". Draghi's comments, followed up by a conditional ECB plan to buy the bonds of troubled euro zone governments, restored relative calm to the markets and limited the euro's fall. This in turn helped to reduce the currency swings which normally allow foreign exchange (FX) dealers to make profits. Between August and November, volume on the CLS system, which settles the vast majority of currency transactions, fell by 11 percent year-on-year. The two major electronic trading systems - EBS, owned by ICAP Plc, and Thomson Reuters - reported annual falls in trades of one currency for another of around 40 and 25 percent respectively. "The whole industry's volumes are
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