Rhomaios Ram, head of global currencies and commodities for Europe at Deutsche Bank in London, said demand for API trading had come predominantly from hedge funds, and that demand would continue to soar. "There's no reason why this rapid increase should not continue. This form of trading enables access to the market that can be relatively risk-free, as it allows funds to trade relatively small amounts very frequently," he said.
Giles Nelson, director of algorithmic trading at Progress software in London, said it was possible that API trading could double from its current level. He added that the company has seen demand from forex matching that from other asset classes. "We have had as many orders from OTC participants as we have from the equity space over the past year."
Stuart Crooks, head of sales for Europe at algorithmic trading technology vendor Flextrade in London, said: "Mid-tier banks are redefining themselves and looking at packaging white-label offerings with better, quicker ways of trading that algorithms can offer."
Icap pointed to positive trends for forex generally. It said increasing cross-border trade and increasing proprietary risk-taking at banks had driven up volumes. It also pointed to the growth of prime broking and the liberalisation of emerging markets as factors behind the growth in trading.