Deutsche Bank Replaces EM Forex Trading Engine in London with One in Singapore

Deutsche Bank​ is reportedly building a global foreign exchange pricing engine for emerging markets in Singapore to replace the one in London, given that trading activities in Asian countries are surging and Chinese Yuan is becoming increasingly important.

The move will help the bank to provide customers in Asia with faster execution of trades, according to David Lynne, the chief of fixed income and currency operations in Asia region based in Singapore, Deutsche Bank.

Singapore is one of the most prominent hub of forex trading across the globe, with its daily FX trading volume averaging $6.6 trillion, just behind the US and the UK. Additionally, Singapore enjoys a market share of trading in the Chinese currency even larger than Hong Kong. 

"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," said David Lynne in an interview.

Deutsche Bank​ also stressed the increasing importance of Chinese Yuan. With a daily trading average of $284 billion, the Yuan has become the most traded currency for emerging markets, according to BIS. Now, FX trading hubs around the world 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.

In addition to efforts to enhance order execution, Deutsche Bank recently also expanded its partnership with Mastercard​ to jointly develop innovations in the area of digital payments for institutional clients, as Fazzaco reported in February.