Foreign Exchange Reserves + 32,4% - the new FX challenge

Foreign Exchange (FX) is the most powerful market in the world. But this is no news. According to the BIS survey one may conclude that the total turnover in global foreign exchange markets is more than 6 times larger than trading in U.S. Treasury bonds and 30 times greater than trading on the New York Stock Exchange (take a look into my last report within e-FOREX 6/2008). Just as a reminder to new readers of this column, the estimated daily traded FX volume is some US$ 3,500 bn a day (6/2008).

Manfred Wiebogen, President ACI The Financial Markets Association Over the past few years the FX market grew rapidly and by most estimates, the trading volumes will continue to grow. The attractiveness of FX may be in its diverse usage – carry trade, momentum and value trade. Whilst in previous years FX was exclusively preserved for an elite group of banks, hedge funds and multinational corporations, the market is now accessible to everybody. Besides the superlative of the daily traded volume in FX, I'd like to draw your attention to yet another superlative which is the growth of foreign exchange reserves throughout the world – mainly in the Asian region and Russia. Exactly one year ago in September 2007, I commented on this topic to Serbian FX traders. Comparing my old figures with these of today I do have to state that FX reserves held by the top ten countries have risen by 32,4% within the last year! Most of this growth is attributable to Brazil (+105,9%), India (+64,4%), Russia...continued

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