Nicholas Pratt
Nicholas Pratt

FX Liquidity – how do you find the right provider?

Nicholas Pratt examines the growing challenge of sourcing liquidity in today’s FX market and what steps trading firms can take to select the right providers.

Selecting the right liquidity provider in the FX market has never been entirely straight forward but it is doubtful that it has ever been as challenging as it is currently. The interbank market of yesteryear may have offered less choice, little transparency and a strong suspicion of being taken for a ride but it was much easier to pick a provider. And there was no liquidity mirage.  The advent of electronic trading, electronic communication networks and multi-dealer platforms led to the need for liquidity aggregators and more advanced technology to navigate through a sea of recycled liquidity. And then, following the Swiss National Bank (SNB) event in January 2015, when the central bank removed its currency peg and unleashed chaos in the FX market, the uncertainty around liquidity provision became all too apparent. For the various vendors operating in the liquidity management space, it has been an important 12 months in which they have had to prove the reliability of their services and the ability to...continued

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