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Fixed Income Markets Research (Asia ex- Japan) presents its analyses to clients
The 2nd part of Fixed Income Markets Investment Series 2010 was held in Hong Kong on October 27, 2010. Its title was "Foreign Exchange (FX) Strategies in the Low Yield Environment". During the luncheon presentation, FX Research & Development representative in Asia shared his views with over 60 clients on the following topics: How should investors adapt their FX strategies in the low yield environment?- Daily FX market turnover reaches USD 4 trillion - What is driving the growth? - Can CNY become an international currency? - A tale of three markets.
The final part of Fixed Income Markets Investment Series 2010 will be held in Hong Kong on November 10, 2010.
Eddie Wang, Head of FX Structuring for Asia, said, "In the low yield environment, several trends have emerged in the FX market, and market players are adjusting their strategies. First, investors are accelerating capital flows to high growth emerging markets in search for higher yield. Currency risk is an important factor for these investments. In emerging markets where onshore currency hedging is not easily accessible, investors can consider alternative approaches such as offshore hedge, proxy hedge and portfolio hedge. Second, investors look to generate returns in the currency market. Traditional strategies including carry trade are still popular, but more market players are turning to new methods such as high frequency trading. This trend is demonstrated in the recent growth of FX market turnover driven by the investor community. Third, as CNY speeds up its internationalisation process, a deliverable market has developed in Hong Kong, in addition to existing onshore and offshore markets. The CNY market in Hong Kong will play a key role toward the long term goal of full convertibility. International investors can now access this new market to gain exposure to China."
