Bloomberg Foreign Exchange executives today said a survey of FX professionals showed uneasiness over the impact of regulation and changes to market structure. More than 80 percent of those polled at a Bloomberg FX conference said they were concerned about the impact of recent regulations on their businesses.
The Bloomberg FX survey found that market participants are against structural reform and are at odds as to which industry model is best for the future. The majority of the respondents remain opposed to an exchange-traded model or a clearing house model, while nineteen percent believe the FX markets should have both clearing houses and exchange-traded requirements.
"Earlier this year the Foreign Exchange market survived the Greek financial contagion, the European debt crisis and doubts about the survival of the Euro. Now, FX professionals are focused on everything from monetary policy and capital flows to revaluation and intervention," said Tod Van Name, Bloomberg Global Head of FX and Economics, who led the Bloomberg FX conference. "FX is facing a critical juncture and it's important that all perspectives be heard to understand how regulatory changes will impact the market, the industry and all its participants."
The Bloomberg FX survey also showed:
* Market participants are paying more attention to currency risk: 71 percent of FX professionals believe currency risk is more important to them than one year ago, with 51 percent saying currency risk was significantly or "a lot" greater.
* Continued trouble for Euro: 66 percent think EUR-USD will remain below 1.40 over the next year, with 29 percent holding that EUR-USD will hover between 1.20 and 1.30.
* Continued appreciation of the Yuan: Near unanimous anticipation of Yuan appreciation, with 29 percent anticipating the USD-CNY to decline between 10 percent and 13 percent by end of 2012.
* Fed target rate: Market professionals see the Fed continuing to hold the target rate below one percent through 2011, with low anticipation of an inflationary climate prior to 2012.
The Bloomberg FX10 conference featured sessions on the major trends in currency and exchange rate policy, economic analysis as well as buy-side discussions on asset allocation, risk and market uncertainty. The conference was attende att attended by more than 300 portfolio managers, FX traders, and FX sales executives, at Bloomberg headquarters in New York.
Van Name added, "The Bloomberg FX conference gave industry leaders an opportunity to discuss key issues and share insights on what the marketplace feels is most important. This information allows us to build the best tools and solutions for FX professionals."