FX traders feel the squeeze in Apac

Rising foreign exchange trading volumes, new client segments and greater demand for electronic execution are creating opportunities for trading businesses across Asia-Pacific (Apac). But intensifying competition, shrinking spreads and rising technology costs mean higher volumes are not necessarily translating into greater profitability.

This briefing from the Risk.net Trading Leaders’ Network in Singapore captures insights from senior trading professionals on how firms are responding – from targeting new sources of FX demand and investing in structured solutions to managing the economics of electronic trading and preparing for smaller, more specialist, data-driven desks.

Among the takeaways:

• Higher volumes don’t guarantee growth: volatility is driving trading activity, but greater price transparency and competition continue to squeeze margins
• New clients create new opportunities: private capital, family offices, small to medium-sized enterprises and digital-payment platforms are expanding demand for FX hedging and execution
• Electronic trading is a double-edged sword: automation improves efficiency and scale but increases infrastructure costs and accelerates spread compression
• Complex products offer higher margins: structured solutions and derivatives create revenue opportunities but demand greater capital discipline and risk oversight
• Regional growth requires selectivity: evolving Asian FX markets offer opportunities, alongside regulatory, operational and infrastructure costs.

Download the report to explore how trading leaders across Apac are adapting their business models, identifying profitable growth opportunities and balancing investment in technology with the need for specialist expertise in an increasingly competitive market.