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Investors brace for increased foreign exchange volatility - Institutional Asset Manager

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Professional investors are forecasting increased volatility and trading across the foreign exchange markets, new global research from blockchain-based derivatives trading platform CloseCross shows.

A study of professional investors around the world responsible for around USD380 billion in assets under management found 28 per cent are predicting a dramatic increase in volatility on currency markets over the next six months with nearly half (47 per cent) predicting a slight increase. Less than one in 10 (9 per cent) believe volatility will ease.

The increased volatility will be accompanied by an increase in trading with 76 per cent expecting the level of trading to increase over the next 12 months. Around 23 per cent are predicting a significant rise in trading.  Around 17 per cent expect the level of trading to stay the same while just 7 per cent believe it will drop.

The study for CloseCross, which enables traders to generate profits through a simplified three clicks process of selecting an asset, predicting price-bracket(s), and committing funds to these predictions, for a variety of asset classes including forex pairings, crypto, stocks, indexes and commodities, reveals a wide range of views on currency movements (see the tables below for views on the Euro and Dollar). which is regulated under MIFID II, rules

For example, 37 per cent of the professional investors surveyed, who include hedge funds, wealth managers, institutional investors, fund managers and IFAs, expect the Euro to strengthen against the Swiss Franc over the next 12 months while 47 per cent expect it to stay the same and 16 per cent expect it to weaken.

CloseCross  CEO, Vaibhav Kadikar, says: “Traders on the FX markets are in for a tough six months with increasing volatility making it more difficult to correctly predict market movements and making trading riskier.

“Professional investors are clearly split on what will happen to the prices of major currencies which inevitably makes it harder for retail traders. CloseCross enables traders to generate returns based on their asset price predictions in any direction, including predicting stability of prices.

“The platform also offers CloseCross Crowd Wisdom which provides real-time data on the views and investments of other traders enabling investors to make a more informed forecast based on increased transparency. People can choose to follow the crowd or go on their own views.”

CloseCross is regulated under MIFID II rules offering increased protection and transparency for customers. Unlike other trading platforms, there are no participation fees for using CloseCross, and its patented multiparty model ensures that leverage is not needed to achieve potentially outsized returns. Money placed on incorrect predictions is lost, but you never lose more than what you put in as there is no leverage needed or possible on the platform. Users pay facilitation fees, only on their winning trades, giving them significant savings when compared to traditional trading platforms.   

The platform also provides real-time data on the predictions of other traders enabling investors to make a more informed forecast based on increased transparency. People can choose to follow the crowd or go on their own views.