I took this portion out due to your post today Richard it bothered me, I recall all to vividly the net bubble and i sure hope currency stays solid.
thetimes.co.uk
WEDNESDAY OCTOBER 25 2000
Commentary
Ins and outs of the trade surplus
MARTIN BARROW
Internet takes a leap forward
The Internet is at last coming of age for business. Twelve months from now, the bulk of business dealings in currencies round the world could transfer from the telephone to on-line foreign exchanges. This change is the more likely because it will be the natural progress of evolution rather than a sudden revolution. For a decade, big banks have traded electronically with each other in the main currencies through technology operated by Reuters and Electronic Broking Services. But that trade has shrunk as both banks and Europe’s currencies have merged. So banks looked more to grabbing deals with business customers, such as exporters or investment managers.
Individual banks opened for currency trading with customers on their own websites. Several true electronic trading systems have started up, offering quotes from a choice of banks. Already, more than a tenth of business currency deals are on-line.
The big battalions will now complete the transformation. FX Alliance, backed JP Morgan, HSBC and UBS and ten other banks, planned to start a fully fledged on-line exchange by Christmas. It had better hurry because it is already in danger of being eclipsed by the scheduled spring arrival of yesterday’s yet more impressive newcomer.
Atriax is backed by banks accounting for more than half the world’s £1,000 billion-a-day foreign exchange market. It will also have the backing of Reuters data and technology.
Liquidity and therefore tighter prices are likely to gravitate to only one or two exchanges, even assuming that the existing inter-bank market survives. That hardly matters in trade between dollar, yen and euro, but could make a big difference to the cost of buying or hedging minor currencies. Competition between Internet portals should ensure that it is worth customers’ while to go on-line. Liquidity is vital if multinationals and fund managers are to be able to deal in big sums. |
