FXCM Pro: Volatility to dominate conversations at iFX Expo Dubai
FNG Exclusive Interview… FNG caught up with Mario Sanchez, Managing Director and Global Head of Sales at FXCM Pro, ahead of the iFX Expo, which takes place between 17-18 January in Dubai. The firm invites everyone to speak to its team at booth #80 about how its strategic partnerships and market-leading solutions provide clients with competitive pricing, innovative products, and best-in-class market access.
FNG: Mario, you have worked in the FX market in various roles for over two decades. What is it about this market and industry that you enjoy?
Mario: I joined FXCM Pro in 2011 and since then the market has completely transformed itself and grown exponentially.
With the pandemic and growth of hybrid working, digitization has transformed the FX market over the past couple of years. Technology has grown significantly, and FXCM Pro has ensured our offering enables clients to access the market when and where they need to.
In 2022, the BIS revealed that volumes reached a staggering $7.5 trillion per day, highlighting the growth in trading and the importance of the industry in recent years.
On a personal level, no day is the same in the FX market. While you can make predictions, it is challenging to know exactly which way it will go next, which is exciting. I also regularly meet and interact with people and cultures from around the world at events like the upcoming iFX Expo, which I find really enjoyable.
FNG: FXCM Pro is exhibiting at the iFX Expo Dubai in January. What do you expect to be the key themes at the conference?
Mario: Volatility dominated the FX market in 2022, with the US dollar (USD) surging to 20-year highs while the British pound (GBP), Japanese yen (JPY), and the euro (EUR) dropped to record lows.
The FX markets show little sign of stabilisation and this, coupled with existing geopolitical tensions, will be a big talking point at the conference. This uncertainty creates more opportunities for institutions seeking alpha and pitfalls for those seeking to manage their FX risk.
FNG: What are you looking forward to most at the expo?
Mario: The iFX expo is set to bring together around 3,500 people in one place, providing great collaboration and networking opportunities.
The FX market has been extremely busy over the past few months due to rising inflation, aggressive monetary policy and geopolitical tensions and I look forward to discussing these trends with fellow experts in attendance.
I’m also always excited to talk about what makes FXCM Pro unique in this space including our commitment to being ‘Client First, Trade Driven’, and some of the offerings and moves we’ve made in the past year to support our clients through these uncertain times.
FNG: Onto recent market developments, the ECB and Fed maintained their aggressive stance on inflation, how has this affected EUR/USD?
Mario: In December, the US Federal Reserve slowed down the pace of its tightening cycle. Still, it maintained its aggressive stance while officials raised their projections for the appropriate policy path. They now expect rates to peak at the median of 5.1%, which implies another 75 basis points worth of hikes.
Similarly, the European Central Bank downshifted to a 50 basis points increase but was also very aggressive and actually out-hawked its US counterpart. It signalled further tightening, with Ms. Lagarde saying that rates will need to rise “at a 50-basis-point pace for a period of time”, opening the door to potentially 100 bps of hikes.
EUR/USD extended its advance to six-month lows last week and broke above the key 38.2% Fibonacci of the 2021 high/2022 lows rise. However, it has lost its vigour and consolidates around this region as investors assess the monetary policy path of the ECB and the Fed.
FNG: The Bank of England delivered a smaller interest rate increase, how did this affect the GBP?
Mario: The Bank of England had started tightening a year ago but had been limited to mostly small rate adjustments. This approach has been unable to control surging inflation, and the bank accelerated the pace of tightening over the summer. This culminated to a 75 basis points hike in the previous meeting last month, which was the biggest since 1989.
The bank shifted gears again in December, but towards the opposite direction, since it delivered a smaller increase of 0.5%, bringing the Bank Rate to 3.5% and new fourteen-year highs.
GBP/USD managed to stage an impressive recovery from September’s record lows, which it extended to six-month highs, after the soft US CPI report. GBP/USD has had little reaction to the downshift from the Bank of England, staying under pressure.
FNG: How is FXCM Pro supporting its clients through the uncertainty?
Mario: Monetary policy has been a key driver of this volatility. In line with our ‘Client First, Trader Driven’ mantra, we have been helping our clients navigate these uncertain market times.
In challenging times, banks reassess their eligibility criteria for prime brokerage, making it extremely difficult for small and medium-sized trading institutions to access credit. FXCM Prime identified a gap in the market for a prime-of-prime service aimed at small-to-medium-sized non-bank financial institutions. It acts as a neutral intermediary and facilitates an all-to-all trading model. Users can act as liquidity providers and takers. Crucially, our technology provides direct market access with centralized clearing. This allows our customers to source liquidity from more than ten professional trading venues through a single account.
Our market data has helped boost our clients’ trading and risk management strategies. Historical bid/ask prices are easily accessible by our trading API’s and clients are able to develop, back-test, and automate strategies in a wide-range of software environments to ensure they get the best outcome.
While other firms hike costs in response to inflation, we have made our pricing more competitive. We further reduced spreads on major currency pairs and CFDs for our institutional clients, providing added value to our client’s trading activities.
If you’re attending the iFX Expo Dubai from 17-18 January, get in touch today to set up a meeting with the FXCM Pro team.
The information is intended for institutional and professional clients only.