Blossoming interest

Participation levels in foreign exchange have declined during the past year due to a contraction of the hedge fund industry and exit of many currency day traders. But hedging activity is picking up as businesses and investors protect themselves from volatile currency moves. And forex is increasingly being used as a liquid market to express macro views, as well as becoming an asset class in its own right. Hardeep Dhillon reports

Increased volatility and diminished risk appetite in global markets have resulted in trading to be in much smaller notional sizes this year. Meanwhile, the process of unwinding complex structures and the deleveraging of positions that has kept trading desks busy during the first months of the year is steadily declining over time. But, interest in foreign exchange is nonetheless continuing to blossom in Asia and healthy investment flows are expected to continue, with bankers noting increasing