Forex gets popular for hedging

Investors in the Middle East are increasingly seeking to gain from significant upsides in forex created by unprecedented currency volatility in the global market, according to Claus Nikolajsen, Head of Sales for GCC and Mena at ADS Securities.

“Forex is at the forefront of Middle East investors’ move away from a portfolio dominated by traditional asset classes like equity and real estate to a multi-asset investment portfolio. The rise in forex volumes on our platform has surpassed our own expectations,” Nikolajsen said.

The Abu Dhabi-based forex and commodities trading platform has seen a rapid rise in forex trading volumes on its platform since it launched six months ago.

Commenting on the growing interest in forex trading in the region, Nikolajsen said: “More and more family offices and private investors in the region are prioritising forex investments and hedging in their portfolios while private wealth managers are increasingly looking to forex to widen their product range. The weakness of the US dollar has alerted businesses across the region to their exposure to currency risks and the need for sophisticated currency management.”

Increased forex trading is also being spurred by the growing adoption of algorithmic trading in the region, particularly high-frequency trading where a series of small trades executed in milliseconds take advantage of marginal price movements.

“As forex volumes grow, many investors in the Middle East are seeking greater control over price discovery and trade execution as well as globally competitive prices, which overseas-based platforms have not been able to provide,” said Nikolajsen. 

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