Forex trading shrinks sharply in dismal end to 2013
By Delphine Strauss at the Financial Times
A slump in foreign exchange spot trading deepened at the end of 2013 despite greater clarity on US monetary policy, with investors unwilling to take fresh risks at the end of a punishing year.
Average daily trading volumes at ICAP, the world’s biggest interdealer broker, fell to $71bn in December, a 23 per cent drop from the same month in 2012 and the lowest level since ICAP bought its currency trading business EBS in 2006.
The figures mark the end of a dismal year for currency investors, who cashed in on the yen’s rapid depreciation in the first half of the year but saw their profits wiped out when they misread the Fed’s intentions on the timing of “tapering” its asset purchases.