Over the last few years, fears have arisen that Brexit was likely to have an adverse effect on digital trading within the United Kingdom. However, even when faced with potential adversity, the market itself has not only continued to be extremely powerful, but it has also gone from strength to strength.
As a result, we’re going to look at how digital trading is continuing to be a mainstay in the global Forex market.
The Importance of London-based Forex Markets
Before we can first analyze why the city of London is so significant to global trading, it’s essential to initially outline what Forex trading is and why Brexit-related fears emerged. Essentially, the term is also referred to as foreign exchange and is a decentralized global market on which the entirety of the world’s currencies can trade. One of the principal reasons that people feared a knock-on effect from Brexit is because the Forex market is the largest in the world and averages a daily trading volume of over $5 trillion, which presented a potentially enormous loss to the United Kingdom.
Despite reservations regarding the city’s long-term stability within the market, its geographical location continues to be a pivotal factor in why London is in a position of strength. Since 2016, the UK’s global daily Forex turnover has increased by 6 percent to a record total of 43 percent after taking shares from other global traders. Another crucial element in London’s continued dominance relates to the convenience of the UK’s time zone as it lies between both Asia and the United States.
Furthermore, as a result of newly-introduced rules by the European Union, transparency through an equity-oriented market approach has thought to have had a positive impact on the number of global trades that are going through the UK. As a result of the time zone overlap, the contemporary low-risk regulations have encouraged Asian and American markets to trade through London due to the time convenience.
Methods Driving Global Growth
Aside from convenience-related factors contributing to London’s existing digital trading supremacy, the ever-growing online Forex broker industry is also proving to be extremely beneficial to traders. At the time of writing, the UK’s Forex brokers are regulated by the Financial Conduct Authority, which ensures that the market is safe for both new and advanced traders. When in the process of encouraging digital trading on a global scale, some of the top-rated UK Forex brokers offer traders a sign-up bonus. Trusted brokers such as Alpari and FBS incentivize involvement through cashback and non-deposit promotions in attempts to grow the market by attracting beginners to the field.
Moreover, the advanced nature of technological developments within London is generating new employment opportunities in modern-day trading roles. A primary example of this concerns FinTech and the integration of technology within the approaches of financial service companies. According to a recent report conducted in London, the UK’s FinTech sector, in relation to jobs, is growing by 61 percent each year.
Tech and Timing Paves the Way for Long-Term Dominance
Despite Brexit looming, the digital trading market within the UK has yet to falter. With new regulations seeing foreign markets operating within London’s convenient time zone, in addition to the emergence of digital approaches such as the rise in trusted online brokers and the FinTech sector, there is nothing to suggest that the Forex market will fall away in the English capital.
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