The share of total foreign exchange trading volume executed electronically increased to 58% in 2009, up four percentage points from a year earlier, according to a study by Greenwich Associates.
Electronic trading volumes were up 16% in the Americas for the year and 44% higher in Asia, but trading volumes remained flat in continental Europe and dropped 10% in the United Kingdom.
Electronic foreign-exchange trading volumes in the customer market increased 7% in 2009, compared to an expansion of 25% in 2008.
Hedge funds were among the most important drivers of foreign-exchange trading volumes in the years leading up to the global financial crisis, and contributed significant amounts of new trading business to electronic systems, according to a Greenwich news release.
“Through 2008, electronic trading systems were capturing almost half of the hedge fund FX trading volumes,” Greenwich Associates consultant Tim Sangston said in a news release. “That share dropped to 44% in 2009, as the total amount of electronic trading volume generated by hedge funds dropped 15%.”