Reuters.uk – Foreign exchange trading volumes rose in 2005, with increased turnover from asset managers, pension funds and retail traders making up for a lull in hedge fund activity, a surveyreleased on Monday showed.<\/p>\n
Global currency trading volume reported to Greenwich Associates, rose almost 14 percent in 2005 from 2004, with funds making more cross-border investments and selecting currencies as an asset class in their own right.<\/p>\n
“In 2004 hedge funds that were trading FX as a discrete asset class were the primary drivers of new trading growth,” said Greenwich Associates consultant Frank Feenstra.<\/p>\n
“In 2005, however, our research suggests that increasing activity on the part of fund managers was responsible for a much larger share of the growth.”<\/p>\n
Unlike equities or fixed income, currency trading does not take place in one location or exchange and conclusive data on turnover and volume are hard to come by.<\/p>\n
The firm said average foreign exchange trading volumes among fund managers and pension funds increased almost 48 percent from 2004 to 2005, making up 20 percent of global trading volumes — up from 15 percent in 2005.<\/p>\n