London is still the top spot for Forex trading according to City-Am and Reuters latest findings. But why is London such a draw for foreign exchange trading?
On an average day in April London executed around £2.7 trillion in FX transactions, whilst our friends across the pond only did about half that ($994bn). In the UK, that’s a 27% increase year on year in 2017. Transactions rose but 11% in Hong Kong and 10% in New York. Interestingly enough, Singapore volumes dropped by 5%.
So why do traders love London based Forex Brokers?
Here’s a few reasons:
- The time: it’s basic, but London sits neatly between the two time spectrums. Open before the US markets and after the Asian markets.
- Language: English may not be the most commonly spoken language in the world, but when it comes to finance it’s up there.
- Regulation: depsite the battering the FCA gets, whenever they move the goal posts, they are one of the most responsible and flexible regulator’s out there. They look after the consumer, whilst being relatively commercially focussed.
- Technology: whilst there are some amazing developers around Europe and the US. London is still the go-to place for careers progression in finance.
There’s a big boom in all sorts of fin-tech at the moment. Currency brokers, who handle large international currency transfers have seen a massive expansion in the market and a rush for customers. Although deliverable FX volumes pale in comparison to margin Forex, they are increasing.
Of course, there is always talk of big Forex brokers leaving London for offshore or European headquarters because of Brexit. So that may have a small impact on FX volumes in the short term. But London’s infrastructure, culture, regulation and talent pool will always be a draw for FX traders.
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
Richard’s contributions and expertise have been recognized by respected publications such as The Sunday Times, BusinessInsider, Yahoo Finance, BusinessNews.org.uk, Master Investor, Wealth Briefing, iNews, and The FT, among many others.
Under Richard’s leadership, the Good Money Guide has evolved into a valuable destination for comprehensive information and expert guidance, specialising in trading, investment, and currency exchange. His commitment to delivering high-quality insights has solidified the Good Money Guide’s standing as a well-respected resource for both customers and industry colleagues.
You can contact Richard at richard@goodmoneyguide.com
