Bloomberg FX Survey Reveals Anxiety on Market Regulations
* Concern over market regulation, structural changes, currency risk
* Majority see Yuan appreciating, Euro weakening in near term
* Little anticipation of target rate increase before 2012
Business Wire
NEW YORK -- November 18, 2010
Bloomberg Foreign Exchange executives today said a survey of FX professionals
showed uneasiness over the impact of regulation and changes to market
structure. More than 80 percent of those polled at a Bloomberg FX conference
said they were concerned about the impact of recent regulations on their
businesses.
The Bloomberg FX survey found that market participants are against structural
reform and are at odds as to which industry model is best for the future. The
majority of the respondents remain opposed to an exchange-traded model or a
clearing house model, while nineteen percent believe the FX markets should
have both clearing houses and exchange-traded requirements.
“Earlier this year the Foreign Exchange market survived the Greek financial
contagion, the European debt crisis and doubts about the survival of the Euro.
Now, FX professionals are focused on everything from monetary policy and
capital flows to revaluation and intervention,” said Tod Van Name, Bloomberg
Global Head of FX and Economics, who led the Bloomberg FX conference. “FX is
facing a critical juncture and it’s important that all perspectives be heard
to understand how regulatory changes will impact the market, the industry and
all its participants.”
The Bloomberg FX survey also showed:
* Market participants are paying more attention to currency risk: 71 percent
of FX professionals believe currency risk is more important to them than
one year ago, with 51 percent saying currency risk was significantly or “a
lot” greater.
* Continued trouble for Euro: 66 percent think EUR-USD will remain below
1.40 over the next year, with 29 percent holding that EUR-USD will hover
between 1.20 and 1.30.
* Continued appreciation of the Yuan: Near unanimous anticipation of Yuan
appreciation, with 29 percent anticipating the USD-CNY to decline between
10 percent and 13 percent by end of 2012.
* Fed target rate: Market professionals see the Fed continuing to hold the
target rate below one percent through 2011, with low anticipation of an
inflationary climate prior to 2012.
The Bloomberg FX10 conference featured sessions on the major trends in
currency and exchange rate policy, economic analysis as well as buy-side
discussions on asset allocation, risk and market uncertainty. The conference
was attended by more than 300 portfolio managers, FX traders, and FX sales
executives, at Bloomberg headquarters in New York.
Van Name added, “The Bloomberg FX conference gave industry leaders an
opportunity to discuss key issues and share insights on what the marketplace
feels is most important. This information allows us to build the best tools
and solutions for FX professionals.”
The Bloomberg Professional® service provides a full suite of foreign exchange
functionality, from global and regional news to data, analytics, price
discovery, electronic trading, and position keeping. FX execution via
streaming or request for quote is conducted at no cost to both the buy-side
and the sell-side. Bloomberg FX is available on the Bloomberg Professional
service at FX <GO>. Non-Bloomberg users can find out more information at
http://www.bloomberg.com/professional/foreign_exchange/ or by calling
+212-318-2000.
About Bloomberg
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countries. For more information go to www.bloomberg.com
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