Markets

FX Markets: Are we moving toward a less globalized state of affairs?

May 24, 2022 - 3 Minutes
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Earlier this year, our firm was recognized as one of the Top 10 firms in forwards dealer rankings as recognized by Risk.net and FX Markets.

"We make sure we understand what the client needs," says Ivan Dexeus, Managing Director and Head of FX Dublin. "We tailor our offering around insightful market colour, tight spreads on eFX platforms and a very active salesforce that will seek axes on the larger interests."

How do you decipher what's currently driving FX markets?

"You take a step back and look at the bigger picture. The Russia-Ukraine war. Inflation. A post-pandemic world. Are these the drivers you look at? Not in insolation," says Mark McCormick, Director and Global Head of FX Strategy. "Look at these as recurring global events. War. Politics. Social change. These are the constant drivers of markets. The Russia-Ukraine war is not a constant driver in isolation, but war itself – or political division – is."

Analyzing historical data, we can effectively predict how markets are likely to react to comparable events. These broader drivers constantly repeat themselves throughout history, but in a different, more modern way each time.

How are these events causing volatility in FX markets?

A keen observation to note is that we appear to be moving toward a less globalized state of affairs. Prior to Russia's attacks on Ukraine, events like Brexit, the actions of U.S. President Trump, trade wars between U.S. and China, and USMCA, suggest that global leaders are more interested in supporting a national or domestic trade agenda than supporting a global one.

The uncertainty over how the world wants to be organized going forward because of this political discord is what is causing volatility in the markets. To this we need to add the hawkish turn of central banks around the world as they react to the rise in inflation.

The only constant is change

The most predictable part of reading financial markets is that change is constant. Understanding how the world is habitually changing and reshaping allows our team to effectively evaluate market risks. Having spent decades in this space, we're able to continually adapt our framework to these changes and allow our clients the flexibility to react and organize their goals to fit a constantly changing world. Our team combines this knowledge and insight with additional resources across the entire TD enterprise to provide accurate and tailored pricing models for our clients.

FX Forwards is a significant area for our firm, with the global market representing 65% of all FX trades. Leveraging our keen ability to analyze what's happening in the markets, we tailor our services and products so clients can enter and exit the market at very competitive prices while having minimal market impact.

eFX at TD Securities

The successes we've had, coupled with the fact that FX has become more of an electronic business over the years, has led to a strong focus and further development of our eFX platform. By working closely with our quantitative, technology, sales and trading teams, we make sure to keep pricing strong and as consistent as we can to provide great client experience.

We take a data driven approach, closely monitoring key metrics (such as hit ratios) alongside platform data. We are continuing to invest in our eFX product to enable more customisation and greater connectivity for clients. TD also engages with third party companies for innovative execution solutions and to be able to offer clients new and exciting services, for example FX HedgePool, XTX Markets and Curex.

Headshot of Ivan Dexeus


Managing Director and Head of FX and Commodities, Dublin & Co-Head of European Institutional FX Sales

Headshot of Ivan Dexeus


Managing Director and Head of FX and Commodities, Dublin & Co-Head of European Institutional FX Sales

Headshot of Ivan Dexeus


Managing Director and Head of FX and Commodities, Dublin & Co-Head of European Institutional FX Sales

Headshot of Mark McCormick


Director and Global Head of FX Strategy

Headshot of Mark McCormick


Director and Global Head of FX Strategy

Headshot of Mark McCormick


Director and Global Head of FX Strategy

Headshot of Ellie Griffiths


Vice President and Global Head of eFX Sales

Headshot of Ellie Griffiths


Vice President and Global Head of eFX Sales

Headshot of Ellie Griffiths


Vice President and Global Head of eFX Sales

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