Barclays Stockbrokers sees investors turn to FX trading as Sterling recovers

16 April 2009 / by Rachael Stiles
Barclays Stockbrokers has reported a rise in the number of FX (foreign exchange) investors as they capitalise on the Sterling's gains against the Euro and the US Dollar.

The FTSE has started to recover from the tumultuous last few months, and the Sterling continues to gain strength after falling to record lows against the Euro, Barclays Stockbrokers said, which has led to a week-on-week increase in FX trading.

GDP vs. US Dollars have accounted for 29 per cent of total trades this week, and Barclays Stockbrokers has seen a 23 per cent increase in the average trade size, which suggests that there is a growing appetite among investors to gain returns from FX markets.

Commenting on the results, Barbara-Ann King, head of investment at Barclays Stockbrokers, says: "As sterling has begun to rise in value in recent weeks we have consistently seen clients capitalising on this trend, trading on our FX platform.

"Three out of the five most traded pairs in recent weeks have included sterling and we have seen the size of trades increasing as our clients become more confident in trading in this asset class."

Meanwhile, City Index has also noticed a swing towards Sterling/Dollar trading. Neil Looker, Chief Dealer at City Index FX Institutional, commented: "The FX Market is in consolidation mode as it awaits significant earnings reports from JP Morgan and Google tomorrow. Sterling/Dollar is eyeing the psychological level of 1.5000 once again."

He added that investors reacted positively to this week's news from the Council of Mortgage Lenders that mortgage activity was up slightly last month, which, Mr Looker said, has "added to the optimistic sentiment that the UK housing market may be starting to stabilise."

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