2015 Forex Industry Predictions: IPOs, Volatility and Platforms

The Forex Magnates staff put together their 2015 forex industry predictions. Included are thoughts on potential deal making, regulation, trading

forex industryWe’ve spent several posts reviewing 2014, now it’s time to look forward to what will happen in 2015. Today we are gathering the thoughts of our editors for their predictions for 2015. But, as usual, we want to know our readers’ opinions and forecasts for the coming year.

IPOs and M&A

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One of the hot topics in the forex industry are companies going public. Starting off our predictions, our CEO Michael Greenberg believes that 2015 will continue to be strong for potential IPOs. The reason he sees potential is that, as we saw in 2014, beginning the IPO process doesn’t guarantee that it will take place. Last year, several brokers who began the process eventually pulled back, such as TraderXP and Anyoption.

For 2015, Michael believes we are going to see more firms begin the process of evaluating what the capital market response will be to their business. He adds that just because a firm tries to but doesn’t go public, it doesn’t mean it failed, it just means that they didn’t receive the terms that they anticipated. This is an important point, as many in the industry have been looking with envy at how Plus500 successfully went public in 2013, and how insiders have been able to ride the wave of enthusiasm in their stock price to cash out more of their positions.

And if those IPOs don’t work, a broker can also go the way of finding a buyer. Avi Mizrahi believes that there will be more consolidation in the industry. However, not just in forex; Avi predictis that some binary options deals take place as well.

Market Moves

Avi Mizrahi believes that 2015 will see the return of the carry trade. But, unlike in the past when the dollar was the funding currency of choice, the carry trade will move towards the euro and yen as their central banks deliver negative rates compared to rising yields from the Fed.

Taking a contrarian opinion on the Fed, Victor Golovtchenko isn’t so sure dollar rates will move higher just yet. What Victor is expecting are record volumes in the FX industry as volatility rises. Victor views it this way, “Fed fails to deliver, we could see a big selloff of long positions established in H2 2014. However, if [the Fed] in fact raises interest rates, this could spill over into emerging market funding troubles, led by Russia.” Either way, it nicely sets up to be a volatile 2015.

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Victor adds that the volatility won’t be limited to the dollar, with both the yen and euro being active. As he states, “At the same time the ECB is facing a tough time deciding whether to engage in outright government bond purchases when the Greek Achilles heel is resurfacing as a political conundrum. The Bank of Japan has already picked its course and the more it engages in it, the more the yen will depreciate, unless a global stock market rout unfolds prompting repatriation and liquidation of Japanese yen shorts.”

Platform War

Jeff Patterson’s bold prediction is, “Tradable’s integration with Monex will really take off and some other brokers will begin to follow suit.” While Jeff believes that this is a longshot, if correct, he envisions Tradable’s advancement eroding some of MT4’s monopoly on the forex market.

Speaking about MetaTrader, I predict that MetaQuotes decides to stop selling MT4 servers to new customers in order to forward MT5. They’ll still support MT4 and sell new server licenses to existing customers who need to scale their operations, but new brokers will have to use MT5. This is based on 2014 having been dedicated by MetaQuotes to evolving the MQL4 and MQL5 programming languages so that they become nearly identical.

Regulation

Unlike in 2014, we only have one regulatory prediction. Adil Siddiqui believes that the FCA will fine firms due to their account-opening procedures. Specifically, he thought that the FCA will become more active in governing financial promotions for opening new accounts and how brokers handle self deposits.

The US

Lastly, I predict that we are going to see a new entrant into the US forex market. It could be a foreign broker making an entrance into the market, or an existing US financial firm expanding into forex (and not just one of those white label deals like ETrade with FXCM).

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