Heering Ligthart President ACIThe Financial Markets AssociationFinancial Markets Director Fortis Bank.
Heering Ligthart President ACIThe Financial Markets AssociationFinancial Markets Director Fortis Bank.

FX Liquidity and e-Forex. An issue?

Customers sometimes complain that FX markets lack real Liquidity. Whatever the reasons for this, Heering Ligthart believes that eTrading should increase Liquidity in the market by making it more accessible.

First Published: e-Forex Magazine 9 / Foreword / January, 2003

During discussions, either in private or during a panel, where customers are taking part as well, sooner or later the question will be raised or a remark made, about why the bank was not able to execute the whole customer transaction in one shot. Sometimes this will lead to the customer concluding that the FX markets are lacking real liquidity, or that the liquidity is declining or has declined substantially. The question then is: Is the customer right or wrong?Does the customer really understand the meaning of liquidity or are they simply disappointed that they weren’t able to execute their whole transaction amount at the same rate? If customers have the idea that they should be able to do any amount, under all kinds of market-conditions, in any currency and they consider this as the definition of liquidity, there is clearly a problem. This type of client will approach its bank for a quote under difficult or even extreme market conditions and ask a price for a large amount.It will be clear that such a...continued

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