{"id":1447850,"date":"2026-09-01T10:21:00","date_gmt":"2026-09-01T08:21:00","guid":{"rendered":"https:\/\/www.payoff.ch\/news\/the-new-order-in-the-foreign-exchange-market"},"modified":"2026-09-16T15:06:47","modified_gmt":"2026-09-16T13:06:47","slug":"the-new-order-in-the-foreign-exchange-market","status":"publish","type":"post","link":"https:\/\/www.payoff.ch\/en\/news\/the-new-order-in-the-foreign-exchange-market","title":{"rendered":"The New Order in the Foreign Exchange Market"},"content":{"rendered":"\n
You are one of Switzerland\u2019s largest online foreign exchange brokers. To what extent did the recent yen intervention affect your trading volumes \u2013 was there a record day?<\/strong><\/h5>\n\n\n\n

Our trading volumes are likely to exceed those of typical private banks, which is hardly surprising for a bank with a strong focus on trading.<\/p>\n\n\n\n

On days such as the recent yen intervention, we do indeed see higher volumes because market activity increases significantly. However, it was not a record day, as the yen is only one part of our broad product range.<\/p>\n\n\n\n

Moreover, it was not the first intervention to prop up the yen. Following such interventi-
ons, the market often rebounds and tests the authorities\u2019 resolve once again.<\/p>\n\n\n\n

The market consensus is that the era of pure US dollar dominance is coming to an end, with other currencies gaining greater prominence. Is this already reflected in the trading volumes of your clients?<\/strong><\/h5>\n\n\n\n

It depends on what one means by “US dollar dominance”. Political and geopolitical trends, as well as rising debt levels, do not inspire confidence in the US dollar as a store of value. However, it can lose value whilst still remaining the lingua franca of the global economy. The US has the deepest and most liquid financial market, and an infrastructure on which a large part of the global economy already operates.<\/p>\n\n\n\n

Central banks are likely to increasingly diversify their dollar reserves. However, we do not foresee a decline in the market share of the USD in foreign exchange trading. According to the BIS\u2019s triennial survey, the US dollar accounted for 89% of all foreign exchange transactions in April 2025, up from 88% in 2022.<\/p>\n\n\n\n

This duality is best illustrated by reserves. Gold has overtaken US Treasuries as the largest single reserve asset held by central banks for the first time since the mid-1990s: at the end of 2025, gold accounted for 27% of global central bank reserves and US Treasuries for 22%. Nevertheless, dollar-denominated assets as a whole still accounted for 42%. And this reallocation took place in US dollars, as gold is still priced and settled in US dollars.<\/p>\n\n\n\n

The Swiss franc remains strong, but is being held back by the Swiss National Bank (SNB). How do you assess its current role for investors?<\/strong><\/h5>\n\n\n\n

The SNB acted early and steered Switzerland safely through the waves of inflation. The strong Swiss franc has cushioned some of the imported inflation. At the same time, upward pressure on the exchange rate persists. With high demand and low inflation, low interest rates are almost inevitable.<\/p>\n\n\n\n

For yield-seeking investors, the Swiss franc has therefore never been a favourite. On the contrary: those seeking yield are more likely to go short on the Swiss franc. The low interest rates make it the ideal funding currency, and the Commodity Futures Trading Commission (CFTC) data show persistently high short positions. Whilst the yen remains the classic funding currency, it has lost some of its appeal. The risk of intervention hangs like the sword of Damocles over yen carry trades, whilst short-term franc rates are trading at near zero or slightly negative.<\/p>\n\n\n\n

What does the FX offering of Swissquote comprise, and which client segments benefit from it?<\/strong><\/h5>\n\n\n\n

The FX offering of Swissquote comprises interbank liquidity as well as spot, forward and swap transactions across a wide range of currencies. In addition to G10 currencies, we cover numerous emerging market, Gulf Cooperation Council (GCC) and Central and Eastern Europe (CEE) currencies. Access is via electronic trading platforms, our own FX platform and API connections.<\/p>\n\n\n\n

Our clients include banks, financial institutions, asset managers and hedge funds. We also support companies ranging from SMEs to large international corporations in hedging currency risks. Both segments benefit from the same infrastructure and liquidity.<\/p>\n\n\n\n

What challenges are companies currently facing when managing currency risks?<\/strong><\/h5>\n\n\n\n

Many companies operate internationally without having the treasury department of a large corporation. The difficulty rarely lies in market sentiment, but rather in the process: who hedges what proportion of the exposure, when, and according to which rules?<\/p>\n\n\n\n

Added to this is the interest rate differential between the Swiss franc and other currencies, which has a direct impact on forward prices. As a result, the discussion often shifts to the supposedly “right” timing, even though the focus should be on risk management and predictable cash flows.<\/p>\n\n\n\n

If you define a fixed hedging ratio and a rolling horizon, you do not have to make the decision anew every time. Only then does the question arise as to whether a forward contract is sufficient or whether a Structured Product better meets the requirement. Without a clear framework, even the best instrument becomes a gamble on the timing.<\/p>\n\n\n\n

In foreign exchange (FX) and contracts for difference (CFDs), you advertise execution speeds in the millisecond range. Does a similar execution speed also apply to individually structured FX notes?<\/strong><\/h5>\n\n\n\n

Within the structured FX products segment, Swissquote operates as an issuer, particularly with dual-currency notes (DCNs).<\/p>\n\n\n\n

However, the process differs from traditional foreign exchange trading. With a bespoke structured bond, execution does not take place in the millisecond range, as each transaction must be assessed individually.<\/p>\n\n\n\n

Our aim remains to provide an indicative price and feedback as quickly as possible. Responsiveness is a key element of our offering, even for bespoke solutions.<\/p>\n\n\n\n

Swissquote has been active as an issuer of Structured Products on SIX since 2022. What role are currency-based Structured Products set to play in the future?<\/strong><\/h5>\n\n\n\n

Our Structured Products business has grown significantly. In our view, this growth reflects confidence in the Swissquote brand, our expertise and the strength of a Swiss bank. We expect both our issuance business and our brokerage activities to continue to grow. The two areas do not compete with one another, but complement each other. Our wide range of instruments and solutions offers clients greater diversification and freedom of choice, depending on their needs and objectives.<\/p>\n\n\n\n

You offer direct FX trading and Structured Products. When would you be more likely to advise a wealth manager to opt for direct access to the forex market, and when would you recommend the structured option?<\/strong><\/h5>\n\n\n\n

Whether a linear instrument is sufficient or a Structured Product is more suitable depends on the risk involved. Spot and forward transactions are transparent and cost-effective. They track the direction of the market, but not its volatility or level. For simple risks, that is sufficient.<\/p>\n\n\n\n

A wealth manager with euro positions and clients whose reference currency is the Swiss franc can fully hedge the currency risk using a forward contract. However, if the euro rises, they do not benefit from the appreciation. A participating forward can hedge the same exchange rate whilst simultaneously allowing a share in the appreciation \u2013 at a fixed percentage and without a premium. This comes at the cost of a portion of the upside potential, the amount of which depends on the price of volatility. If the risk and market assessment go beyond a simple “up or down” scenario and volatility is part of the assessment, a Structured Product is the better instrument. Otherwise, a straightforward forward contract serves its purpose.<\/p>\n\n\n\n

Thank you very much, Mr Atalay.<\/strong><\/h5>\n\n\n\n

__<\/p>\n\n\n\n

About the author
<\/strong>Fatih Atalay is Head of FX Trading at Swissquote and oversees spot and options trading in currencies and precious metals. He joined Swissquote in 2011 and has led teams and initiatives aimed at expanding electronic trading. Prior to this, he worked in market making for exchange-traded derivatives in Amsterdam and Zug. He took his first steps in the banking world whilst at university and immediately afterwards, working at UBS and Credit Suisse. He graduated from the University of Zurich with a Master\u2019s degree in Finance, specialising in Quantitative Finance.<\/p>\n\n\n\n

__<\/p>\n\n\n\n

Info<\/strong>
Swissquote delivers comprehensive Forex swaps and forwards solutions fully compliant with ISDA SIMM\u2122 Methodology, enabling banks, corporations in import\/export, and financial institutions to navigate and mitigate Forex risks.<\/p>\n\n\n\n

\u2022 Extensive currency portfolio
\u2022 Precious metals trading
\u2022 Flexible maturities
\u2022 Immediate market access
\u2022 Advanced trading options
\u2022 360T\u2009\/\u2009Bloomberg\u2009\/\u2009Refinitiv FXall\u2009\/\u2009Integral<\/p>\n\n\n\n

Contact<\/strong>
Website
Forex Swaps and Forex Forwards: Comprehensive Solutions | Swissquote<\/em><\/a>
Email
B2B-CCFSS@Swissquote.ch<\/a><\/em>
Phone
+41 44 825 89 90<\/p>\n","protected":false},"excerpt":{"rendered":"

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