By V.SaravananI Year MBA

Anna University Coimbatore

EMERGING TRENDS IN FOREX MARKET

FACTOR X In The 3rd Quarter Of 2004, Buffett

Posted Profits Of $412

Million........Because of Factor X Bill Gates May Have  Been Following His Friend Warren Buffett's Advice.... As He Began His

Investments in Factor X Bill Gates Was 2006‘s..World's Richest Man….

George Soros Made His Name...By  Earning $1 Billion On… 1 Day, In 1992; It Is Estimated That Soros Has Made $7 Billion In The 3 Decades

From 1969 To 1999! Due to Factor X

FOREXDemocratic Market

For the Money ,By The Money ,To the Individual

With Capitalistic Idea

Let Money to do More For us

FACTORS INFLUENCE FOREX MARKET

FOREX

MARKET

Market

System

Economy

GOVT POLICI

ES

Social

GLOBAL FOREX MARKETGlobal Forex Volume Surged to 36% growth during the 2006-2007.

Consistent Double Digit Growth in volume.

Highest liquidity: Daily global trading volumes would likely reachUS$5 trillion In 201

Deal flow in the foreign exchange market is increasingly transacted electronically.

An annual turnover more than 10 times world GDP

Source: BIS Triennial Survey 2007

Factors that Drives the Forex Market In Indian Context

Market & Forex Market System

Govt Policies

Economic Shift

Social Trends

Lucrative Nature of Forex Marketchronos and Kairos Phenomenon • 24/5, offers convenient trading• Forex exchange is the largest financial

market in the world , over $3 trillion in trades every day

• Liquidity factor due to large number of Trader base globally

• Optimum Leverage , Margin accounts in Forex Ranges from 100:1 to 200:1.

• Minimum Trade Accounts • Lucrative ROI in Short Term. Profit booking in both ends during rise

as well as fall

Government Policies

In Indian Context, Central Govt acts as an Facilitator in increasing Global transaction.

• Complete Liberalization Pricing And Payment Methods

• Separate Governing Body like Foreign Investment Promotion Board to clear proposals of around $358.3 million.

• Monetary Policy Favoring Forex By containing Inflationary Pressures.

• Foreign Exchange Reserves of India rose to $2.79 billion for the week ended April from earlier $2 billion mark, Retains the Forex Market More Active.

Govt Policies

• In 2009 Exim Bank extend 20 lines of credit covering 20 countries to support export projects, in total 114 Countries.

• 16 corporate were assisted to invest in 11 countries aggregating investments of around Rs.2,338 Cr by Exim Bank in 2009.

• Approval from SEBI to commence operations in currency futures, Across four pairs of currencies US dollar-rupee; Euro-rupee; Pound Sterling -rupee and Japanese Yen-rupee widens the Exposure of Foreign Exchange Market.

• The Extensive Run Of Equity Market also Favors the Forex Marketing to Mark able Highs

• Budding brokerage Firms Also an Exact Phenomenon for Developing Financial markets in India

“64 Indian cos display consumer products at Canton fair”

Paves Way For increased Global Transactions.

Economic ShiftGovt has given its nod for $157.89 million FDI .Acts as a

stimulus for FOREX Market India Witnessed 56 % Jump ON FDI on YoY basis.Appreciation of Rupee acts as an mobilizing factor Forex in

Indian context. currency gained 11.7% in the past year against the dollar.GDP of 8-9% ,Favors the FDI,FII portfolio in India shows the

attractive location for FOREX.Corrective action against inflationary pressures restores the

inflation in control through hikes of interest Rates in significant Phases Mobilizes the FOREX.

WPI Inflation expects to slow down by 6% percents by the year end , Insists the progression of Economy

Moderate Inflation Favors the Investment Activities in a Developed Economy

In 2009,the FDI in emerging Markets accounts 51.6% of global FDI (Ernst & young survey on Globalization).This fact plays a

Vital force for the Forex Market

Social TrendsInvestors Confident analysis by JPMorgan Reveals

that 48% retail investors expected growth in income looking forward for investment opportunities.

70%of Corporate believes improvement in Profits.The young and Risk Taking Population of India lead

to investor Population.Society Comprising the Half Billion salaried

Population acts as an open source for investment ,About 7 million people possess the Demat Account. Shows the increased awareness of the Investment in India.

Increasing NRI population increases the Currency transaction activities to larger extent.NRI deposits for April- June 2009 around $849 million and outflow $167million .Shows the huge Potential of India FOREX Market.

India enjoyed the Highest salary hike in the world of around 15.2 % on an average 9-10% YoY basis .Enhances the investment opportunities in the society-Quantum Of Disposable income Increased

Increased Entrepreneurial Attitude also Favors the Capital Market

Social Trends

ConclusionThe Combined Force Of - Global Equity Market - Economy Growth

- Increased Foreign Investment - Foreign Transaction

Acts as Combined growth drivers of FOREX Market in India

From the Current 16th Position in Global FOREX Market to Further Highs.

References

BIS Triennial Survey 2007

Data On Salary,Payscale.Inc.,Ernst & Young Survey on Globalization Jp Morgan Investor Confidence SurveyRBI GDP Report & FDI .WW.Eximbank.Org.ww.fxmarket.com

Let Money To Do more For US