Seppo Leskinen, SEB Merchant Banking Head of Hedge Fund Services , Global Foreign Exchange shares his views on why 2006 was such a tough market environment for FX managers and more...
The FX market is one of the most efficient - how then do managers still generate lucrative returns?
Not all participants in the foreign exchange market are profit seeking organisations. Typically central banks, corporates that need to hedge foreign payments and tourists do not or cannot maximise their profits.
Naive strategies demonstrate that phenomena such as forward rate bias exist, and that they are profitable. Skilled managers exploit such opportunities to develop lucrative return strategies.