Despite excitement and expansion in the foreign exchange market, hiring in the area appears to be strong rather than spectacular. Recruitment for emerging markets FX sales teams and Italian corporate sales teams is said to be particularly perky.

Dominie Moss, a consultant at search firm Sheffield Haworth says most banks are interested in hiring FX staff at VP level and above. “We’ve had candidates with two or three offers on the table,” she says. “It’s creating an aggressive compensation environment and with three months notice periods now the norm most banks are racing to get their hires done before the end of Q2.”

Banks building their FX teams are understood to include Dresdner Kleinwort Wasserstein, which is committed to growing its 150 strong global team by 10% a year, and Bank of America, which is completing a build out begun in 2005.

Credit Suisse is also said to be expanding, while Lehman Brothers recently announced the appointment of Richard Gladwin, head of FX at Barclays Capital. Meanwhile, UBS has created ripples among its own FX sales and trading teams in London by threatening to move trading operations to a cheaper location in Zürich.

However, most recruiters agree that FX recruitment this year is about widespread modest growth and upgrading rather than wholesale expansion and change. “There’s been a lot of hopping from bank to bank,” says David Rose, a consultant at Principal Search. “The market has been busy and people are moving to upgrade their packages.”

“There’s been quite a lot of hiring this year,” agrees Neil Price, managing director of FX-specialist recruiter Michael Williams Associates. “But you don’t have the likes of Merrill Lynch and Barclays Capital, who hired huge numbers of FX people in 2002 and 2003-4 respectively.”

Emerging markets hot spot

FX recruiters are undeniably busy, but given expansion in the FX markets it’s perhaps surprising that they’re not busier still. A recent report by research firm Greenwich Associates suggested globally currency trading volume rose almost 14% in 2005 compared to 2004, with UK volumes alone rising 40% during the year.

At the same time, FX markets have seen plenty of action, with the US dollar falling against the pound and euro in the past few weeks following speculation that American interest rates are close to peaking and concerns about the ballooning US trade deficit.

However, recruiters report that it’s emerging markets salespeople, traders, and Italian corporate sales specialists who are currently exercising banks’ hiring muscles.

“There’s definite demand for salespeople who can work with emerging markets corporates,” says Rose at Principal Search. “And because volatility is higher, there’s also demand for traders who can work emerging markets currencies.”

Demand for FX salespeople who can work with Italian corporates is recovering after the Parmalat and other scandals, according to Rose. “After Parmalat, Italian corporates were wary of using FX derivative products to hedge their risk,” he says. “As a result, in the past few years banks’ Italian FX sales desks have been making half what they were making in the late 1990s. But we are now starting to see that reversing.”