One of the big providers of technological solutions in the FX industry Boston Technologies has announced in a press release that its strategic Liquidity partners Boston Prime Ltd and BT Prime Ltd are launching a new emerging markets cross that will boost the company’s exposure to South-East Asia.
The Thai Baht to the US dollar has been made available by launching USDTHB trading on all of the company’s platforms. The move comes only a couple of months after Boston Technologies has announced the availability of the offshore renminbi on its Metatrader 4 solution and serves to reiterate the company’s commitment to expand its offerings of emerging markets products. The company will offer a 1:100 leverage on the pair with the minimum order size totalling to 0.01 lots.
An ongoing transformation in the FX space and the necessity for a broader set of products can be attributed to the fact, that volatility in major currency pairs has pushed many institutional investors away from trying to pick lacklustre trends in the major currency pairs. Trading their emerging market counterparts has been an ongoing shift, with last year’s stellar under-performers - the Turkish lira and the Russian ruble taking centre stage on the FX market in 2013 and the beginning of 2014.
One of the key offerings by Boston Prime that caters to newer markets is targeting Emerging Asia and Turkey with liquidity streams catering to gold traders, which are specifically designed for brokers that are servicing clients interested in trading large precious metals positions. Normally the traders behind these positions are not active, as they buy and hold for long periods of time. While many Liquidity Providers are not keen in doing business in this space, Boston Technologies seems content to pursue customers in this area.
BT Prime's Head of Sales and Marketing, Natallia Hunik has commented on the development stating that "Boston Technologies has been rapidly expanding its global footprint in the past few years and as as a result, we have a well-diversified client base representing more than 80 different countries. Our interests are always aligned with those of our clients and we do our best to understand their needs and deliver solutions they require to succeed in their markets."
When asked by Forex Magnates whether this was a part of a broader emerging market push, or an effort directed to cater to trader's keen in taking advantage of trading opportunities surrounding the Thai Baht, Ms Hunik said that "It is part of a wider Emerging Markets push and it is also instigated by the trading opportunities in Thailand at this time. We have also established a presence in that market with a local representative. Clients from the region are very keen to trade this instrument."
Thailand's Ongoing Political Crisis
Political turmoil on Thailand has triggered a move away from the Thai Baht, which has also been one of the big under-performers last year. However with recent developments drawing to a more positive outcome from the current political crisis, flows seem to be returning back to the country.
Thailand’s central bank has cut interest rates to levels unseen since December 2010, with an ample consensus for a quarterly contraction in the first half of the year. A technical recession would dwindle the prospects for another government formed by the billionaire Shinawatra family that has been at the core of antigovernment protests ever since former prime minister Thaksin Shinawatra was ousted and exhiled after a military coup in 2006.
The newest batch of political turmoil has started after protests erupted in October of last year against the current government of Thaksin’s sister - Yingluck Shinawatra which has been gathering political support from rural areas driven by populist subsidies for rice producers. With the state of politics and the lack of transparency being at the center stage of the political sphere in the country, a national revolt has been unleashed to overthrow the government.
As a result after new elections in February were boycotted by the main opposition, the Thai Constitutional Court has invalidated the latest national polls and the Election Commission is expected to vote on a new date for a fresh vote. Meanwhile current prime minister’s Yingluck Shinawatra’s government will be in a caretaker mode which greatly limits its ability to make any moves to tackle current roadblocks for revival of economic growth in the country.
Crisis creates opportunities
Looking ahead the current political turmoil is not expected to be resolved in a decisive manner, however most of the negative news have been priced into the currency market and the Thai Baht has been rebounding from multiyear lows set in the aftermath of the eruption of protests.
One of the main sectors that is driving economic growth in the country, tourism, has collapsed following the violent protests clashed between opposition and pro-government supporters have resulted in a number of deaths. Hotel occupancy rates have fallen to about 50 percent, which is much lower than the the usual 80 percent at this time of the year.
As currency traders know - every crisis creates a new opportunity, and Boston Technologies is aiming to make use of this one by attracting prospective traders who are looking for more volatility driven trading. The lousiness of moves in major FX pairs could certainly drive even more business towards emerging market currencies in the coming quarters assuming that the trading conditions are right.
