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Liquid validity
So do you think they fill their orders at any price, that it's effectively random to the rest of the market (and to them)? If they don't care about the price of execution...do they care about the time they execute? Do they care about anything? Are billions thrown around with such randomness?
You need to apply some context to the deals taking place and their motivation.
A lot of, but not all, large insti FX trades are purely on behalf of or placed
directly by multi national companies as a hedge against future revenue receipts
in another currency. Also there is the issue of said companies having more than
one base currency for operating capital accounts.
Say Toyota place a deal with a UK based ancillary manufacturer in yen
for delivery at a future date. The UK manufacturer now carries yen market risk,
which it needs to hedge in the FX market.
Flip that around and Toyota japan do the same deal in euros with Bosch for
a batch of diesel injectors, now Toyota carry euro risk they need to hedge.
In other words, these kind of international deals drive hedge trades which
are time sensitive, not price sensitive.
Is there any way of knowing when that will happen, an indicator, or futures
tape & order book or even the interbank market itself, put simply, I don't believe so.
Then again price and probability will suffice for us mere mortals.
The only indicator that will work there is inside info, which is actually not illegal
in FX markets and so is another driving force in itself.
In short a lot of insti level large size is trade related, indeed, China owning
a boatload of USD is purely trade related.
Obviously there are other factors such as central banks and so on as well.
In answer to original question, I don't know.
Depends on who the most dominant participants were at that time and their motivations.
Its pretty much central banks, large speculators or trade hedging that drive price.
Who wins in the moment on the day, those with the deepest pockets.
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