FX Swap Market Eyes Further Electronification to Enable Streaming Prices
London – Increased electronic trading within the interdealer foreign exchange (FX) swap market is seen as a crucial step toward enabling the wider adoption of streaming prices for dealer-to-client transactions, according to market participants.
The shift towards electronic execution is already underway in dealer-to-client swaps trading,with request-for-quote (RFQ) and request-for-stream mechanisms gaining traction.UBS’s Head of e-FX Distribution for Europe, the Middle East and Africa, Ozgun Unal, noted the growing trend. “[Dealer-to-client swaps trading] is increasingly executed electronically,either via request-for-quote (RFQ) or request-for-stream,” unal said.
The move to greater electronification aims to improve price revelation and efficiency in the FX swap market, ultimately facilitating a transition to more transparent, real-time pricing for end-users.FX swaps, agreements to exchange principal and interest payments in different currencies, are a significant component of the broader FX market, used for hedging and investment strategies.
