Currency traders go online

Some of the world's largest foreign exchange dealers are to launch an online trading service prompting fears of job cuts in the City.

More than 50 banks, accounting for more than half the global turnover of $1,500bn in foreign exchange transactions per day, on Tuesday announced the setting up of the online currency market Atriax.

Traders who log onto Atriax, which will become fully operational next spring, will receive quotes in more than 100 currencies, said the site's backers, led by Chase Manhattan Bank, Citibank and Deutsche Bank, and data group Reuters.

The platform will modernise a market which, while the world's largest in value terms, operates on an ad hoc basis, Atriax's chief executive elect Dan Morehead said.

Forex revolution

"The [foreign exchange] industry is fairly antiquated," Mr Morehead said. "People still make phone calls, scurrying from one bank to another to get prices.

"The industry does not even have a centralised marketplace, let alone an electronic one."

But some observers predict that the launch of Atriax will prompt more job losses in the foreign exchange markets.

When eleven European currencies disappeared into the euro at the beginning of last year, many foreign exchange traders lost their jobs.

Bank mergers have also reduced the need for foreign exchange trading between institutions.

Staff to go

Atriax would, by enabling back office operations to be automated, allow banks to cut back on back office staff.

The unveiling of Atriax follows a series of announcements of online trading platforms.

Thirteen banks including UBS Warburg, JP Morgan and HSBC, have already unveiled the web-based forex platform FXall, set to go live later this year.

An FXall spokeswoman told BBC News Online: "We do see Atriax as a competitor. But it will absolutely not mean the end of FXall."

FXall's backers account for about one third of the daily volumes on currency markets.

Four mining companies on Monday revealed they are developing web-hosted marketplaces for metals trading.

The same firms are backing Global Coal, an internet-based trading platform timetabled for launch by February.