Momentum in U.S. Market Looks Promising for FX Specialists

Take a quick look at foreign exchange market turnover, and it's easy to see where the new job opportunities are opening up. There's always going to be intermittent hiring at bulge bracket firms and global banks given the risk strategy. They're always going to need FX traders, trading strategists, risk pros, and algorithm and platform developers not to mention experienced professionals with quant skills.

But according to data from the Bank for International Settlements, the bulk of growth in FX market turnover since 2007 came from increased trading by smaller banks, mutual funds, money market funds, insurance companies, pension funds, hedge funds, currency funds and central banks. The 2010 Triennial Central Bank Survey goes on to say that the boost is being driven in particular by high frequency traders, those smaller banks, and retail investors.

Electronic trading is the reason for the shift, of course. The survey says high frequency traders are banks trading as clients of large FX dealers and retail investors trading online. Barclays, Deutsche Bank, and UBS remain the biggest FX dealers.

FX is the world's largest financial market. The BIS report notes that the U.K and U.S. are the countries with the most active FX markets. Given that, it's hard to understand why Forex traders haven't had as high a profile in the U.S. as equities and options guys.

Maybe it's because the retail market hasn't traded in the products as much. But expect job prospects here to continue to improve. The momentum of FX trading is steady, given the need to hedge the risks associated with emerging markets and the volatile U.S. dollar. New products and new ways to trade them - including additional listings of CME FX products - are also driving interest.