Forex Trading Moves Closer To Computer Platform

Amid recent controversy regarding illegal activities within international currency markets by licensed traders, a growing number of investment banking executives are calling for a full transition to electronic, computer-based trading platforms that do not rely upon the soon-to-be “obsolete” human “voice spot” trading.

The advantages of a fully integrated electronic trading platform are obvious. By the very nature of the code manifested to create the trading algorithms and platforms, compliance is simply a non-issue. There exist no opportunities for malicious or deviant behavior when all trading is undertaken within a carefully monitored and regulated software infrastructure.

Although electronic trading methods were virtually unheard of at the dawn of the new millennium, roughly 74% of all currency trading now occurs through software platforms. That being said, investors should not completely forget voice trading just yet. In the spot market, where currencies change hands directly and traders themselves assume the risks previously held by market-makers, roughly 35% of all trades still occur via voice trading.

As an increased volume trading switches into the electronic currency trading marketplace, it is expected that the larger players in the industry will continue to grow and quickly develop overwhelming dominance. Currently, the most prominent electronic trading platforms for currency exchange are Deutsche, Citi, Barclays and UBS.

One of the largest criticisms of electronic trading is the decreased profit margins that results from such exchanges. Unlike voice trading, which allowed for decreased transparency and the opportunity to quickly shift massive quantities of wealth, electronic trading typically requires these large actions to be broken into significantly smaller quantities, resulting in increased financial loss and, therefore, decreased profit.

While some believe that electronic trading helps reduce in-office manpower levels, this couldn’t be farther from the truth. In fact, electronic trading platforms commonly require up to a 33% increase in personnel, as software algorithms and infrastructure must constantly be maintained. Additionally, many state that this “neutral” interface remains a vehicle for wrongdoing. Claims have been made that these electronic platforms can be engineered to adjust pricing levels depending upon mouse movements and behaviors of consumers, leveraging their uncertainty or desires against them.

Osborne to target foreign exchange manipulation

In a statement which could be causing numerous brokers and financial strategists to sweat, Chancellor Osborne has announced that he will be working closely with a variety of regulatory experts in order to ensure that the foreign exchange marketplace within the City Of London is free of corruption and other dubious dealings. One of the final unregulated marketplaces on the planet, the world of foreign exchange, also referred to as “forex”, remains largely out of sight and is primarily managed by traders who have been given a variety of buy and sell orders on behalf of larger global companies.

According to recent allegations, it is believed that 15 major banks have now been involved in forex currency manipulation. 9 of those listed have now suspended or fired forex traders that had previously been working for them. That being said, the extent to which the Osborne and his team of UK-based watchdogs can invoke change is somewhat limited, due in large part to the fact that the forex market remains a global enterprise, largely out of reach of any one nation. While Osborne’s changes may serve to “clean up” his particular “neck of the woods”, it is highly doubtful that his actions will have any lasting impact on the forex industry as a whole.

Of additional concern for Osborne is the potential fallout that could occur before key elections in 2015. Were hefty fines to be levied against UK companies in upcoming months, rival parties could accuse him of failing to act responsibly and ensure the validity and legitimacy of one of London’s most dominant industries. It should, ultimately, come as no surprise that these attempts at regulation are now occurring.

A political move, or perhaps an honest attempt at repairing a fractured industry, Osborne is nonetheless making bold moves into a well-established, highly organised industry that has relied upon its decentralized nature to exchange trillions of pounds of currency to companies around the world over the past decade. It will be interesting to see what, if any, “progress” Osborne can make.

Foreign Exchange Latest – Dollar gains as GBP nears 9-month lows

Although tensions remain high in the Middle East and Ukraine, the US Dollar is slowly pushing back, regaining critical lost ground against the British Sterling and Euro Dollar. Although a variety of 2014 peaks have already been met and exceeded, many experts are in agreement that the US Dollar will need a fresh and compelling impetus to continue its ascent. That being said, an increased in value of USD may comes as a result of international pressure on the EU as opposed to substantive gains on a domestic level.

The US is currently enmeshed in a variety of international conflicts that are causing many to re-assess their investments in the national currency. As Iraq continues to slip further into conflict and the ISIS militant group increases their volume of highly visible, violent demonstrations, many are left wondering what the full extent of US involvement in this conflict will be.

Meanwhile, the ongoing drama between Russia and the Ukraine is producing worldwide hesitation and fear, particularly in financial circles. Recent sanctions placed against the Russian nation are expected to result in an increase in pressure on the Euro Dollar, which, until recently, has been trading at nine-month lows. Although the EU has officially emerged from the devastating recession of recent years, the economic landscape of this region remains quite fragile. Whether or not the EU will be able to reassert their validity in the FX exchanges in the upcoming days and weeks has yet to be seen. Were the conflict between Russia and Ukraine to continue to escalate, it is highly likely that the EU Dollar will experience large price swings.

The GBP has also been experiencing its fair share of suffering, due largely to its association with the EU. For US travelers, this couldn’t come at a better time, as trips abroad will prove to be much more affordable than they would have been otherwise due to a strong US dollar.

As is common with FX trading, the volatile combination of international events taking place on a regular basis can quickly destabilize and reshape short-term expectations. Depending upon upcoming actions taken by the US Government, many believe that the US dollar is poised for increased volatility.

LeftoverForeign Currency? Here’s What You Can Do With It

After the summer holidays have come to a close, many individuals around the world are left with a handful of wonderful memories and an equally large handful of foreign currency from their travels abroad. Although these exotic currency pieces may prove to be a delightful memento of the previous adventure, many people are left wondering what they can do to reap the value of the money they have brought back with them.

One of the most obvious solutions is simply to take the money back to a currency exchange broker and swap it for domestic currency. That being said, it’s important to evaluate exchange rates closely, just as you did during your time abroad, in order to ensure that you get the best deals possible on the money you are returning. Some experts recommend grouping large sums of foreign currency (if you traveled with friends, for example), and exchanging all of this money at one time, as it is likely that you will all receive a more optimal exchange rate.

It’s also worth noting that some foreign exchange brokers offer a “buy-back” option on leftover currency that will ensure that you receive the equal value (according to current exchange rates, obviously) without losing money in exchange fees. Although these services are much harder to find, it may be worth spending time before your trip researching available buy-back options in your area so that you know exactly who to purchase your currency with initially.

A final option may be to simply hold onto the money you’ve brought back, particularly if you are planning on traveling abroad again soon. Instead of losing fractional amounts of currency with each trade, you can simply keep the money in one currency pair and use it again when you resume your travels at a later point. This is especially recommended for business professionals and other individuals who find themselves “on the go” at regular intervals!

There are, obviously, no perfect solutions for this issue, but with a bit of creative, flexible thinking, you can ensure that you emerge victorious in the battle of the exchange rates. Good luck!

Pound will hold up against Dollar – Unless Scotland votes ‘yes’

Over the course of the past few months, it’s been readily apparent that volatility in the FX markets has become practically non-existent. Although brief swings have been seen due to tensions between Russian and Ukraine, as well as the United States and the Islamic militants in Iraq, prices have remained largely stable. Although some traders are predicting devastating fluctuations due to tensions within the UK regarding the possibility of an independent Scotland, others believe that the Pound will stay on solid ground. That is, of course, unless the UK is broken up by a majority “yes” in the upcoming vote.

The value of the Pound is largely created by the collaboration of the various political entities within the United Kingdom, including England, Scotland and Northern Ireland. If any one of these entities were to leave the UK, it seems likely that, at least over the short-term, the value of the Pound would take a hit. When asked to discuss this particular issue, Kit Juckes, a currency strategist with Societe Generale, said that, “The more divided the UK is, the weaker the pound will be…”Sterling’s correction to date has far more to do with the UK rate rethink than anything else, and there is very little political risk premium in the pricing – yet”

Other possible catalysts of price fluctuation could occur in the early months of 2015, when the Bank of England is planning on raising interest rates, the first move of its kind by any nation in recent years. That being said, it is expected that the Federal Reserve of the United States will follow up with a similar move shortly thereafter. The Federal Reserve has indicated that their strategy remains to implement a very slow, gradual increase of rates in order to ensure that the US economy, which is now developing on a much firmer footing, does not get sidetracked.

Regardless of what potential outcomes may occur, it seems likely that the rather lengthy slumber the FX markets have been in may come to an end shortly, which, for many traders, is welcome news.

How Big Should Bitcoin’s Role be in B2B Payments?

What exactly is the future of Bitcoin, and what role should this digital currency play in the B2B payments market, one of the most vital niches within the larger global infrastructure in existence today? These two questions are often asked by financial analysts and industry experts seeking some sort of invaluable insight into the future of the digital currency, not only for speculative purposes, but also in hopes of gaining some sort of traction when developing sustainable business platforms in what is arguably one of the most dynamic and volatile economic climates in recent history.

For some, Bitcoin’s precipitous rise in both value and public interest is a sign that this product (and the revolutionary system it represents) should be avoided at all costs. After all, Bitcoin has not only undermined the modern banking system as we know it, but it has also posed a credible challenge to the sovereign currencies of nations around the world.

These exact critiques are, for some, the very same reasons why they believe Bitcoin is poised to adopt an even larger role in the B2B payments market in the months and years to come. Due to the fact that Bitcoin is arguably much more secure than standard transactions, Bitcoin could trade back and forth on a B2B level without as high a risk of hacking and theft. Combined with the fact that Bitcoin transactions carry no additional charges, some are proclaiming that this method of payment is undeniably a cornerstone of the future 21st century business infrastructure that has slowly been evolving over the past decade.

Regardless of whether or not Bitcoin does indeed become a fixture in B2B payments, it stands to reason that an increasing number of businesses will begin to demand what Bitcoin provides – a no-hassle, expense-free service by which money can quickly find its way into the hands of those who need it the most, all without the threat of a security breach or online theft.

Is this the future of B2B transactions? It seems there are very few reasons why it shouldn’t be. With Bitcoin, however, success is measured not only in literal effectiveness but also public sentiment, a more elusive standard of measure that has proven itself to be a major catalyst for price increases and drops in recent history. If Bitcoin is, indeed, to become a fixture within B2B practices, it must first be embraced by the influencers and thought leaders who hold power over this particular enterprise.

Facebook Wants to Start Handling Your Money – Here’s Why

Gotten swept up into the social media craze in recent years? That’s understandable. After all, never before in the history of the human experience have individuals been able to explore so many elements of their daily lives simultaneously, ranging from pertinent world and local news to advertisements, product placements and social updates from friends and family.

That being said, Facebook is ready to take their immersive experience one step further by offering a convenient and powerful method for undertaking e-commerce transactions with many of the world’s larger retailers as well as between Facebook friends.

In many ways, this information should come as no surprise. After all, virtually every other major internet and tech platform has begun to release tools that individuals and business owners can use to quickly transfer money, pay invoices, etc. One of the more prominent technologies featured recently has been Bitcoin, the revolutionary crypto-currency that has quickly risen to become one of the most talked about and, simultaneously, controversial tech innovations in years.

Currently, there’s no concrete details on whether or not Facebook’s system will handle Bitcoin transactions, nor is there really any information at all! The news leak concerning this payment system was actually instigated by a computer techie at Stanford who discovered lines of existing code within the Facebook infrastructure that allowed for payments to be processed and undertaken via the messenger app.

This, really, is the only information that is actually available at this point. It stands to reason, however, that Facebook would be considering a platform such as this to unleash in the upcoming months, if only to remain competitive with the other tech giants who are operating in similar fashion.

A payment system would also ensure an even more regular supply of traffic to Facebook, which is only good news to investors and shareholders. It’s obvious to see, therefore, that any one of several reasons could be used as justification for implementing this new program. Because of this, it will be quite interesting to see exactly how this product rollout occurs and, more important, when. Timing is everything in the tech world, and numerous businesses have lost out to the competition simply by letting first mover advantage slip out of their fingers. If Facebook is serious about gaining respect and competing with the nation’s other tech giants, it’s definitely important for them to consider just how much time and money they are willing to invest in this particular enterprise.

Simplifying Foreign Money Exchange

Ask any traveler or international business professional what they dread most about venturing to a foreign destination, and it is quite likely that currency exchange will be at the top of their list. Not only does the process of currency exchange require a significant time investment, but it can also be quite expensive for those who are unable to secure competitive buy and sell rates during their transfers.

Like any business where transactions and commission fees go hand in hand, it pays to find a currency trader that you know and trust. Due to the fact that currency exchange rates fluctuate around the clock, it’s important for you to develop a relationship with a currency trader who is committed to finding you the best possible deals, even if those may affect his or her own profit margin on the trade.

If you’re looking to transfer a substantial volume of currency, securing the best possible rates becomes even more essential. Although fractional percentage difference in smaller transactions may be relatively insignificant, this can lead to substantial expenditure differences when the volume of money being transferred increases to higher levels.

A number of services are now becoming available that allow individuals to access the information they need to make responsible decisions regarding not only who they decide assist them with their currency transfers but when the best time to exchange may be. VINIT Solutions is one of several companies that have quickly distinguished themselves for their outstanding customer service and comprehensive transparency. Thanks to no hidden fees and a full-service platform which provides customers with up-to-the-second information on current exchange rates, it’s never been easier to make an informed, rewarding currency exchange that results in decreased financial loss from commissions or exchange rate fluctuations.

As the FX market continues to expand and diversify, it’s only natural that innovators and creative thinkers within the field begin to develop the next generation of tools and software that will help them ensure maximum possible gain for themselves and their clients. VINIT Solutions is definitely one of those companies. Contact them today to learn more about their available services.

Money Remittances to Developing Countries Will Grow ‘5 Percent’ This Year

In today’s volatile world climate, it should come as no surprise that analysts are predicting stronger than ever results from the international remittances market, largely due to the fact that a growing number of international migrants are being forced to leave their homes as a result of violent conflict and other issues. The current numbers are estimating a roughly $435 billion remittances total this year alone, which is nearly a five percent increase over last year’s levels.

One of the many reasons why remittances remain such an important factor in the world of international currency is the fact that this particular form of money transfer allows for expedient transfer of private cash inflows into developing nations. Studies have shown that, in 2013, remittances alone totaled well over three times the sum total of official development assistance.

It is also interesting to note that the relative cost of sending remittances to developing nations has dropped to roughly 7.9% of the total value transferred. That being said, the expenses associated with transferring money to Africa remain inordinately high. Although remittances may continue to expand and grow, the underlying factors contributing to this unprecedented growth are troubling in their own right. Experts now agree that forced migration levels are at their highest since the outbreak of the Second World War. In total, nearly 73 million individuals have been forced to leave their home country due to the outbreak of troubling conflicts.

There remains a silver lining to all of the aforementioned situations, however. A strong regional remittance platform in East Asia and the Pacific is directly helping to promote further economic stability in the area at large. It is also estimated that remittance levels will rebound in Latin America and the Caribbean in upcoming months.

While there is, obviously, no guarantee that the current global situation will remain as it stands today, it is likely that forced migrations and other shifts in global demographics will continue to create a dynamic remittances market that may prove to be advantageous for those whose business interests align with this specific phenomenon. It is likely that 2015 will be as, if not more, exciting to watch than the events of 2014.

Banks Set Aside Billions of Pounds for Forex-Rigging Fines

If future preparations can serve as any indication of former crimes, Barclays recent fund allocations may provide enough proof for skeptics who have been convinced “from the beginning” that UK’s banks, as well as those in other countries around the world, have been engaging in illegal activities within the Forex markets. Currently, Barclays has allocated nearly £500m in order to ensure that any costs or fines incurred in the ongoing investigation regarding forex riggings are fully covered.

Barclays is no stranger to controversy. In 2012, the bank was fined approximately £290m for manipulating Libor, a scandal that pales in comparison to the penalties which may be sustained in upcoming months. Currently, the Financial Conduct Authority is attempting to reach a settlement with six major banking establishments regarding illegal activities in the Forex marketplace, a trading arena that involves over £3.5tn in transactions each and every day.

It is expected that the Financial Conduct Authority will release information regarding their regulatory actions next month. Experts agree that it is quite likely that the FCA will include an exhaustive collection of e-mails and e-chats, all of which point strongly to interest-rate fixing in forex markets among traders with Barclays.

Unfortunately, Barclays continues to soil its reputation with scandals such as this. Shares in Barclays continue to fall as an ever-increasing series of controversies continue to mount. In the third quarter of this year, Barclays’ profits have fallen by nearly £200m when compared to a year ago this time. Almost 8,000 jobs have also disappeared over the course of the last year. That being said, over the course of the past nine months, overall profits for Barclays have risen by approximately 5%.

Although Barclays is currently suffering heavily from some of the costliest scandals the bank has ever experienced, bank leaders have already stated that the bank will continue to pay its 1p quarterly dividend as promised. Whether or not the bank will be able to salvage its reputation after these issues, however, is another matter entirely. More information about this scandal will be available in the following weeks, following pending announcements from the Financial Conduct Authority and Barclays’ leadership.

Category: Money Exchange