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NEW YORK RANKS AS THE TRADING CAPITAL OF THE WORLD

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NEW YORK RANKS AS THE TRADING CAPITAL OF THE WORLD

DailyFX has analyzed the finance and trading skills index, showing which skills can increase your salary, where in the world has the highest number of jobs and what salaries you can expect in the finance and trading sector. 

However, some words of warning: The research and data used in the DailyFX study were taken and analyzed in January, BEFORE the COVID-19 pandemic had impacted global financial markets. This study can be used as a reference and comparison to pre-pandemic areas, such as the health of the financial job market.

“The Top 20 Cities in the Global Financial Centers Index (GFCI)” was culled from data on finance and graduate vacancies per location, individual roles with the most availability and the most financially lucrative cities for each of these roles. Focus on the wider financial industry includes specific reports for trading.

Among the findings:

-London and New York lead the way with the most vacancies per trading role

-Having the skill of UCITS can increase your salary by more than $26,000

-San Francisco leads the way in locations for earning the most in finance

OPPORTUNITY FOR A CAREER

New York provides the most opportunities for those in trading roles. Combined with London they make up 42 percent of all trading roles available at the time of research. The U.S. provides the bulk of the locations, 59 percent of the 24,174 trading roles, with only Zurich and Frankfurt providing Europe’s next best locations.

Rank City Total No. of trading roles
1. New York 5,546
2. London 4,709
3. Chicago 2,823
4. Los Angeles 2,268
5. San Francisco 2,014
6. Toronto 1,761
7. Boston 1,636
8. Sydney 1,322
9. Vancouver 632
10. Dubai 520

 

TRADING ROLES: HOW MUCH DO THEY PAY?

 Rank Trading role Top earning location Salary
1. FX Trader San Francisco $98,280
2. Broker New York $72,852
3. Sales broker New York $74,255
4. Commodities trader San Francisco $63,667
5. Equity Broker San Francisco $85,774

 

OPPORTUNITY FOR A CAREER

Leading the opportunity index is London, with New York joining it at the top of DailyFX’s findings. Both cities provide significantly more opportunities for current professionals than their nearest rivals and graduates with 5.54 percent and 4.54 percent of all vacancies at graduate level. While other locations performed well, in the majority of cases the percentage of vacancies aimed at graduates was well below 1 percent. DailyFX’s results show that the worst location for graduates to look for a new role is Dubai with only 0.01 percent of all roles destined for graduates.

Rank Location Total No. of finance Vacancies  Total No. of finance graduate vacancies    % of graduate positions

 

1. London 32,274 7,499 5.79%
2. New York 17,688 5,881 4.54%
3. Chicago 8,849 1,503 1.16%
4. Hong Kong 8,801 1,432 1.11%
5. Singapore 8,584 971 0.75%

 

FINANCE ROLES: HOW MUCH DO THEY PAY?

Actuaries continue to earn good equivalent salaries at all three of the comparison levels shown. Budget analysts have the highest minimum salary of $53,501, while investor relations can achieve the highest maximum salary at $86,587.

One role with a wide range in potential salary is accountant. The research found that this role, which was most in demand according to vacancy data, has the lowest minimum salary of all roles analyzed at $39,942. Its maximum offered salary peaks at $78,523 but the overall average of $59,763 places it as the third lowest earning average salary.

While much of this data can be used as a guideline, many of the skills underpinning these industry roles are what many vacancies will be looking for. DailyFX undertook further research using the 20 most commonly appearing skills and experience criteria to understand how each particular skill and experience is valued in the industry. This was then used to reveal how the inclusion of each impacts the potential salary offered.

You can view more on the study here: www.dailyfx.com/forex/fundamental/article/special_report/2020/05/13/The-Financial-Trading-Skills-Index.html

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

sanctions

Getting Caught on the Backswing – Will US Sanctions Undermine the Dollar?

Since the Bretton Woods Agreement in 1944 there has been one currency that eclipses all others for international trade: the U.S. dollar. The dollar dominates when it comes to reserves and the settlement of trades, a hegemony that affords U.S. foreign policy incredible strength on the world stage. However, the U.S. reliance on the strength of the dollar to pursue far-reaching sanctions is also beginning to cut at the roots of that strength, as allies and global trading partners simultaneously pursue their own economic agenda and react to perceived over-reach by U.S. policymaker. 

A View from the Top

In 2019, the dollar comprised over 60% of global debt, more than 60% of global reserves for foreign exchange, and was the medium used in 40% of international payments, according to the European Central Bank (ECB). Despite the economic output of the Eurozone roughly matching that of the U.S., the euro accounted for only 20% of foreign exchange reserves and just over 20% of international debt (1).

This allows U.S. foreign policy a potency lacking in other international currencies. The Trump administration has relied heavily on this dynamic, imposing coercive economic measures on a wide spectrum of targets from Venezuela to North Korea and exponentially increasing the number of sanctioned entities. In fact, the U.S. sanctioned around 1,500 Specially Designated Nationals and Blocked Persons (SDNs) in 2018 alone, almost 50 % greater than in any other single year. 

Growing trends have become noticeable in the financial streams flowing between borders; a rise in the use of the euro, RMB and ruble as forex currencies, development of routes around the conventional financial sector, and flurry of interest surrounding the nascent potential of cryptocurrencies. The major drivers of these changes are unrelated to sanction policy and are more tied to the politicization of U.S. monetary policy or the inherent economic interests of other nations and trading blocs, including turning their own currencies into global standards. Regardless of the drivers, these developments suggest an international system ill-at-ease with the power of the dollar.

Secondary Nature, Primary Threat

The unrivaled strength of the U.S. dollar affords U.S. policymakers a weapon unavailable to any other nation. This is built on by the ‘secondary’ nature of U.S. sanctions – extending the impact of sanctions to non-U.S. entities who do business with sanctioned entities or individuals – that leaves few avenues to evade the regime. 

As virtually all dollar-denominated transactions pass through the U.S. financial system, even if just momentarily when they are “cleared,” very few businesses are able to trade with the targets of primary sanctions without themselves falling under the secondary regime. Violators are potentially liable for sizeable fines or other punishments, including being locked out of the U.S. financial system themselves. 

While this is a useful tool for closing down avenues of terrorism, crime or other illicit activity, it also means countries that disagree with the targets of U.S. sanctions must either comply or place their own industry at risk. The EU-U.S. divergence on the Iranian Nuclear deal, or on U.S. sanctions towards Cuba, are good example of this. 

This increasing sanctions activity provides the seedlings that may undermine the dollar’s strength, as it prompts allies that disagree with sanctions regimes to develop alternatives to the dollar – such as the Euro, Chinese RMB or Russian ruble. Special Purpose Vehicles, such as the EU-Russian INSTEX, are created – albeit with difficulty – to provide routes around the conventional financial system. 

Alternatives

Against this politicization of the dollar, various countries are developing alternatives. The euro is staking its claim with the development of the INSTEX vehicle and a declaration by Jean Claude Juncker, then-president of the European Commission, “to do more to allow our single currency to play its full role on the international sector” (2).

Similar gauntlets are being thrown by the ruble – Russia has been developing its own payments system since the Crimean sanctions in 2014 – and the RMB, with the Chinese Cross-Border Interbank Payment System (CIPS) launched in 2015. Given the size of the Chinese market and its growing world position, the RMB could theoretically pose a challenge to the dollar. However, the politicization of the RMB’s value – witnessed most recently in its rapid devaluation targeted at injuring the U.S. as part of the trade war – undermines its use as a global currency in the near to medium term. 

Another potential pitfall for the dollar is the development of new financial technologies, including the much-discussed Blockchain and cryptocurrencies. Such systems allow for the circumvention of the U.S. financial system and enable payments in relation to sanctioned activities, and have already have been used to facilitate illicit payments in North Korea and Iran. 

Mobile payments are also on the rise, further reducing global exposure to the dollar. However, as with other examples above, the use of some of these alternatives are being driven in significant part by illicit activity, which may lay the seeds of its own demise or limited adoption. 

The dollar’s strength on the international stage is undeniable, affording U.S. foreign policy unparalleled reach and potency. However, increasing international attention is being given to the Trump Administration’s fondness for relying on coercive economic measures in foreign policy, including the imposition of sanctions, tariffs, export controls, and investment restrictions. 

Each time a trading partner or ally objects to the U.S. policy goals but is forced to accept a new sanctions regime because of the dollar’s dominance, that dominance is eroded. While the dollar remains by far the best safe-haven for investments, backed as it is by a resilient economy and a history of stability, the potential corrosive effect of sanctions cannot be ignored. The future use of sanctions should factor in this unintended consequence and overall sanctions policy designed to ensure the long-term dominance of the U.S. dollar. 

 

Matthew Oresman leads Pillsbury Winthrop Shaw Pittman’s International Public Policy practice, carrying out high-profile activities in many of the world’s capital cities. He principally advises governments, political leaders, businesses and NGOs on achieving their most important objectives. He regularly designs and implements legal and policy solutions, including managing integrated U.S. and Europe-based initiatives. He advises global businesses on entry into emerging markets and compliance with U.S. and international regulations.

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(1)https://www.ecb.europa.eu/press/key/date/2019/html/ecb.sp190215~15c89d887b.en.html

(2) See Juncker, J.C. (2018), “The Hour of European Sovereignty”, State of the Union Address 2018 – https://ec.europa.eu/commission/sites/beta-political/files/soteu2018-speech_en_0.pdf