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Wall Street Oasis » Forums » Hedge Funhouse
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Do Hedge Funds trade minor currency pairs?
 

Polymath89's picture
Polymath89
     
 
(Senior Chimp, 16
 
Points)
 on 8/10/12 at 6:12pm

As the title suggests I'm wondering whether hedge funds can actually trade minor currency pairs. I don't have any data about trading volumes in e.g a currency pair such as CADAUD, but hypothetically speaking if a big macro hedge fund wants to express a view on those two countries through the exchange rate, could it actually put on a respectably sized position, or would that move the market too much forcing it to use a vehicle currency?

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Tags:
  • Hedge Funds Minor Currencies FX
  • Hedge Funhouse
Macro Arbitrage's picture

.

Macro Arbitrage
      HF
 
(King Kong, 1,369
 
Points)
 on 8/10/12 at 6:37pm

.

"I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine."

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Bondarb's picture

AUDCAD is not a minor cross

Bondarb
      HF
 
 
(Neanderthal, 2,261
 
Points)
 on 8/10/12 at 6:52pm

AUDCAD is not a minor cross at all and is very well trafficked...you can easily do hundreds of millions of dollars worth of it no problem without moving the market much. Hedge funds trade just about every currency pair there is including those which are much much less liquid then that one.

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Koho's picture

Any of the G-10 crosses are

Koho
      ST
 
(Orangutan, 320
 
Points)
 on 8/10/12 at 10:25pm

Any of the G-10 crosses are pretty easy to trade (scandies being the only one with relatively lighter liquidity). When you get into EM ccys then you're in another ball park.

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adast027's picture

Since when have the Canadian

adast027
     
 
(Baboon, 129
 
Points)
 on 8/11/12 at 1:08am

Since when have the Canadian and Australian Dollars been considered minor currencies? Even then New Zealand Dollar is considered a major currency that is traded by every Global Macro, CTA, Currency hedge fund managers.

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Polymath89's picture

Thanks for the answers guys.

Polymath89
     
 
(Senior Chimp, 16
 
Points)
 on 8/11/12 at 4:13pm

Thanks for the answers guys. Sorry for the rather ignorant question, but I'm a Physics student and just started to get interested in Global Macro Trading.

Does anybody know any good papers that shed some light on the market structure of the FX markets?

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Macro Arbitrage's picture

Polymath89: Does anybody know

Macro Arbitrage
      HF
 
(King Kong, 1,369
 
Points)
 on 8/11/12 at 11:30pm
Polymath89:

Does anybody know any good papers that shed some light on the market structure of the FX markets?

For fucks sake...
http://papers.ssrn.com/sol3/papers.cfm?abstract_id...
http://papers.ssrn.com/sol3/papers.cfm?abstract_id...

You'll learn more about micro-structure of any market, not only FX, by executing trades. The worst possible way to start is by reading academic papers, however here's a great book on the topic: http://www.amazon.com/Trading-Exchanges-Market-Mic...

"I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine."

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GS's picture

OP , When you say FX market

GS
      ST
 
(Senior Gorilla, 902
 
Points)
 on 8/12/12 at 4:44am

OP , When you say FX market microstructure , do you mean how EBS/Hotspot/Reuters match trades , how you get bank flow? All that stuff? Because market microstructure is not normally something Gobal Macro traders care about?

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