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Over the last 5 years, global trading volume for the Foreign Exchange (FOREX) market has seen an unprecedented growth, leaping to a record daily volume of US$1.9 trillion (S$3.23 trillion)1. Little known to many retail investors, the FOREX market has been the largest financial market around. Its trading volume in a single day is equivalent to almost 3 months worth of trading volume on the NYSE.
In Singapore, the daily volume has also grown by a spectacular 21% to US$168 billion since 2003, putting us as the world’s 4th largest FOREX trading centre.
This boost in the FOREX trading volume over the past years can be attributed mainly to the increased volatility in currencies prices; caused by the geopolitical instability of the Iraq war, global terrorism, fluctuations in the US Dollar, recent speculation on the revaluation of the Chinese Reminbi and the rapidly rising oil prices.
Globally, fund managers are beginning to include currencies as part of their investment portfolio. At the same time, more retail investors, spurred by the increased popularity of internet trading and the relatively poor performance of traditional investments, have also switched to FOREX trading. Many are beginning to re-ride on the currency wave with added focus on currency trading as part of their investment plans.
Today, FOREX trading has evolved from its original historical role of a by-product from international trade into a distinct asset class of its own. With its large trading volume, supported by increased global interest, it provides infinite trading liquidity and flexibility to any FOREX trader.
Contrary to popular belief, the risk involved in currency trading is almost similar to many other investment products. With proper risk management strategies and good study of the market, FOREX trading can provide boundless opportunities for investors.
Statistics from article in Straits Times, 30 Sept 04, A12, “FOREX trading volume hits record level”
Statistics from an annual (2004) survey of treasury activities by the Monetary Authority of Singapore (MAS)
Statistics from article in Straits Times, 30 Sept 04, A14, “FOREX trading in Singapore expands 21% to $286B”
The above article is provided to you for information only and should not be construed as an offer or solicitation for the purchase of the product mentioned. Although every reasonable care has been taken to ensure the accuracy and objectivity of the information, Phillip Futures Pte Ltd and their employees mentioned cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any advice herein is made on a general basis and does not take into account the specific investment objectives, financial situations or particular needs of any specific person or group of persons. Opinions and views expressed in this article are subject to change without notice. Investments are subject to investment risks including loss of principal amount invested. Due to market fluctuations, there are profit opportunities as well as risks involved in currency trading. Investors should understand such instruments and their underlying risks before and when using them.