The rising funding urge for food within the Center East induced a fast progress within the MENA area’s overseas trade trade pushing particular person buyers in direction of the worldwide markets.
Based on figures from the Financial institution for Worldwide Settlements (BIS), buying and selling in FX markets reached $6.6 trillion per day in April 2019, up from $5.1 trillion three years earlier, with the UAE and Saudi Arabian retail foreign money markets accounting for nearly 0.6 per cent and 0.1 per cent respectively.
This progress is basically pushed by elevated consciousness of the alternatives for buyers within the FX market, in addition to the area’s strategic location between Asia and Europe. The native time zones allow the area to seize market opening hours within the Far East in addition to the US closing hours in the identical working day, thus offering higher entry to the worldwide market, particularly the G7 currencies.
Traders within the MENA area gravitate to value-saving investments specifically protected haven currencies such because the US greenback, Japanese yen and gold.
– Raed Alkhedr, Equiti’s Head of Market Analysis & Evaluation
Improved regulatory controls by varied authorities is one other issue attracting buyers to the foreign exchange trade. Two such authorities within the Gulf area that present a well-monitored regulatory surroundings for foreign exchange buyers are the Securities and Commodities Authority (SCA) and the Jordan Securities Fee (JSC).
Trade progress within the MENA area additionally gained momentum by means of the implementation of Sharia-compliant foreign currency trading and the elevated availability of Islamic buying and selling merchandise. For instance, swap-free accounts are thought-about Sharia-compliant, giving entry to foreign currency trading with out compromising Islamic rules.
Traders within the MENA area gravitate to value-saving investments specifically protected haven currencies such because the US greenback, Japanese yen and gold. Elevated demand for funding alternatives within the MENA area urges particular person buyers to hunt larger alternatives and entry to worldwide markets.
Currently a wide range of world variables made foreign money markets fluctuate strongly and this elevated alternatives for merchants within the Center East, specifically the inconstant financial insurance policies in response to the financial affect of the coronavirus pandemic, accompanied by the fiscal stimulus plans and the US Presidential election. Though there are various disclaimers from authorised entities concerning the dangers of buying and selling foreign exchange, many people within the Center East seemed to foreign exchange to seek out worthwhile alternatives, particularly in valuable metals like gold, which noticed an enormous rally in 2020 reaching an all-time excessive at $2,074 per ounce.
Moreover, the deprecation of the US greenback worth, because of modifications in financial and financial insurance policies, serves to speed up gold costs by means of inflation. Gold achieved 37 per cent progress in its rally from the bottom level in March 2020 to its all-time excessive in August 2020, ending the 12 months with an annual enhance of 24.8 per cent.
This content material comes from Attain by Gulf Information, which is the branded content material workforce of GN Media.