BIS report highlights High Frequency Trading in FX markets

The Bank of International Settlements has published a report on High Frequency Trading and its impact on the  trillion a day FX markets.

Data was collated by representatives of major central banks including the ECB and Bank of Canada. The report looked at the Flash Crash and the Yens heavy move on 17th March.

Although HFT is increasing in the FX markets its weighting is still limited compared to the equities markets. The report doesnt believe that the flash crash was caused by HFT but an algorithm that went wrong.

HFT is concentrated in the major currency pairs such as euro/dollar EUR, dollar/yen JPY, sterling/dollar GBPD4 and euro/Swiss franc EURCHFR, but it has the potential to spread to emerging market currencies, the BIS report said.

Read the full post here.