Forex makes a fortune despite City woes

This summer saw the City come in for some serious flak from the media, the government and the civvies – first over the astronomical sums kicking around in the private-equity and hedge-fund sectors, and then over remuneration in the City in general. Today though, comes news that at least in part justifies a hefty salary for the suits: London’s dominance of the global foreign exchange market continues to grow, and is now nearly double that of the US, its nearest rival.

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Last Updated: 31 Aug 2010

According to the report from the Bank for International Settlements, the UK’s share of foreign exchange trading volumes jumped from 31.3% in April 2004 to 34.1% in April 2007. This at a time when trade in global currency markets was worth more than $3.2trn a day – roughly equal to the annual output of Germany. It’s a phenomenal global growth from three years ago, when totals sat at $1.9trn. The massive rise is down in part to increased interest from retail investors, but mainly – surprise surprise – greater activity among hedge funds.

While bulging wallets are an understandably appealing target for scorn, at least our financial sector is actually beating everyone at its game – unlike our nation’s similarly well-rewarded and equally derided footballers. The credit crunch and the run on Northern Rock has shown, reliance on the financial sector for our general well-being is a rather delicate matter of confidence. News like this can’t do any harm.

Success in the finance sector is of course there for the taking. Look at Peter Cruddas, founder of CMC capital and MT's Entrepreneur of the Year this year. Read about his achievements in this archive piece.

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