Volatility fix for FX

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After months of strength, the Aussie dollar's leaping like a hooked fish. It could be good news for traders working in the sector.

This week saw the Aussie plummet after the Reserve Bank raised rates by a mere 0.25%. Within minutes, FX traders were frantic, and with the market cutting expectations of a May rate rise, the Aussie is now under pressure - or so says Andrew Mitchell, senior FX trader at ANZ bank.

"The exporters, who get paid in US dollars, have been waiting, sometimes months, for a dip to buy Aussies. Sell-offs like this force people into the market. When there's no volatility, there's no action," Mitchell says.

But does it translate into jobs?

Michael Lee, FX specialist with recruiters Jon Michel, says it certainly means FX jobs will be safe. "Volatility is a positive for FX. It's a smallish market here but there's strength in it. Demand is not drying up."

But Robert Rennie, chief currency strategist at Westpac, says the emergence of algorithmic trading and e-tools is ringing something of a death knell for traditional FX traders.

"I make decisions in seconds; machines make them in nanoseconds, 24 hours a day," he says. "It means the sector needs fewer people: it's the natural development."

The good news is that Rennie says FX trading is becoming a whole lot more interesting - moving from "two numbers and a value date" to complex derivatives and a need for more educated, numerate players.

In the mean time, Lee says FX traders are being hired into the mid-market and retail space. Pay ranges from AU$100k to AU$250k with bonuses from little to multiples, depending on sector, area and employer.

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