Currenex and the Rise of Online FX

November 6, 2001

Abstract

Boston, MA, USA November 6, 2001

Online Foreign Exchange trading promises to continue its ascent, especially via platforms such as Currenex’

The foreign exchange market is the largest in the world, with annual turnover of almost USD $1.5 trillion. One major activity in this market is trading among corporations conducting multi-national transactions and their banks. A new breed of intermediary, driven by corporate demands for better pricing and by the Internet, has evolved as a major force in the foreign exchange marketplace. Currenex, an online foreign exchange platform founded in 1999, represents this new breed.

Currenex has developed a robust trading platform combined with information and integration services. A focus on the buy-side has spurred liquidity from the sell-side, and the platform now operates with a member base of major buy- and sell-side firms.The platform is joined in the marketplace by two others: Fxall and Atriax, two bank-sponsored online FX platforms that have recently launched and report strong growth to date.

According to Fritz McCormick, author of the report, “we expect Currenex, as well as other online FX platforms, to gain substantial trading volumes in the months and years to come. However, growth will not happen overnight. Issues contributing to a slower-than-expected adoption of online FX services include lack of standardization and industry reluctance.”

Mr. McCormick continues, “while keeping these potential problems in mind, we expect that over 50% of corporate-dealer trading will be conducted via the Internet by 2005, and that some type of interoperability will exist between the major dealing platforms. Moreover, other FX industry segments, such as smaller corporations and regional banks, will benefit from this technology for their own dealing operations, increasing the productivity potential among the platforms.”

A Table of Contents is available online.

of Celent Communication's Wholesale Banking and Institutional Securities & Investments research services can download the report electronically by clicking on the icon to the left.

        

Send mail to info@celent.com with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA  November 6, 2001

Return to report Abstract

EXECUTIVE SUMMARY 3
INTRODUCTION 4
THE FOREIGN EXCHANGE MARKET 5
MARKET OVERVIEW 6
  Size and Structure 6
  Instruments and Currency Pairs 7
CURRENEX 9
  Member Reaction 12
  Dealing Structure 15
STANDARDS 19
CONCLUSIONS 22

 

        

Sign in to download reports and access personalized information