Deutsche Bank Establishes Emerging Market FX Trading Engine in Singapore

The Bank highlighted the surge in demand for the Chinese Yuan.

Deutsche Bank, a leading German financial services provider, is replacing its London-based global FX pricing engine for emerging markets with the one in Singapore amid a surge in trading activities across the Asian region.

According to the latest report published by Bloomberg, the bank has selected Singapore to improve its order execution. Deutsche Bank also mentioned the boom in high-frequency trading in Asia and the importance of time in FX order execution.

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Singapore is one of the top-ranked FX trading destinations around the world. According to a report published by the Bank of International Settlements (BIS), the city-state is just behind the US and the UK in the $6.6 trillion-a-day FX market.

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“Singapore is growing as a major regional liquidity center, and we along with some of our competitors are building capacity here to boost the speed of transmission into more Asian countries. The upgrades we are making in new hardware in Singapore substantially increase our technical capability. Singapore is faster than Tokyo in transmitting FX pricing into local Asia FX markets,” David Lynne, Head of Fixed Income and Currencies, APAC at Deutsche Bank AG told Bloomberg during an interview.

The Rise in Chinese Yuan

Deutsche Bank highlighted the recent surge in demand for the Chinese Yuan. The national currency of China accounts for nearly 4% of the global currency volume. According to BIS, the Chinese Yuan has already reached a daily average volume of approximately $284 billion. Global FX trading hubs are competing for a larger share of Yuan trading.

“We’re increasing our algo capability for China, which requires access to CFETS (China Foreign Exchange Trade System) data. We already see a majority of our products trading purely on algo. We expect to see more of that activity pricing on algo in the future,” Lynne added.

During the release of its latest market statistics for March 2021, the Singapore Exchange (SGX) reported a surge in Yuan volumes.

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