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In swaps we trust? Disappearing dollars drive currency trading dependence

“It affected us in the FX swaps market a great deal” writes Midwest Communications Inc for LONDON (Reuters) – As dollars dry up, global finance is growing increasingly dependent on opaque currency trading to keep cash flowing.Reflecting the increased reliance on currency markets to borrow dollars, FX swap volumes have grown to represent 49% of total currency trading, from 42% in 2013, Bank for International Settlements (BIS) figures from August show.”We have dollar liquidity that partly depends on (the) forex swap market, as we don’t have dollar deposits.Unlike regular ‘spot’ currency transactions, swaps involve two parties swapping one currency for another.

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