Currency forex online trading: Forex is again a very active market. According to Reuters.com it was kind of slow a while ago.
After several lackluster years, the $5-trillion foreign exchange market has bolted back to life with institutional investors leading the charge and banks standing to gain from the activity.
Currency volumes spiked in January and have stayed robust so far. This is thanks to an unexpectedly strong and persistent rally in the euro and weakness in the yen. There is also a demand from institutional clients, and increased flows in world equity markets.
A strong mergers and acquisitions sector has also boosted turnover in the world's largest financial market, as often large volumes of currencies need to be traded for cross-border transactions.
All that currencies volume is reflected in the currency Forex online trading, which means more opportunities for making profit.
"It's not just leveraged customers betting on where FX is going, it's more real money business, more hedging, bringing longer-term players back into the market," said Peter Taylor, managing director of FX trading at Barclays in London.
The largest brokerage firms and banks experienced the busiest trading days this January. In recent years, it hasn't been like this. The euro zone debt crisis scared investors and confined them to the sidelines, while low volatility has curbed currency moves.
Currency Forex online trading contribution to total fixed-income revenue from the top global investment banks has fallen since 2008 due to competition from other currency trading platforms and low volatility, said London-based financial analysis firm Coalition.
Investors this year seized on the weak yen theme, a trend that emerged in November 2012 when it became apparent Shinzo Abe would become Japan's prime minister. Abe favors aggressive easing to end Japan's tenacious deflation, which has spurred a wave of yen selling that has persisted to this day.
Market participants have shorted the yen as a way to play the carry trade, which involves borrowing or selling a currency with a low interest rate and then using the proceeds to buy another with a higher yield.
On the other hand, short bets on the euro have unwound sharply on the view that euro zone crisis fears have eased. As a result, central bank reserve managers brought their euro weightings back to more normal levels from underweight.
It seems that it is a good idea to get involved in Currency forex online trading in this moment to take advantage of the current situation.