Bloomberg to Challenge Reuters in Forex Trading
Bloomberg, LP has decided to move beyond its dominance in the trading of fixed-income securities to the foreign exchange market. This is the bailiwick of Reuters, which has long dominated the trading tools of the currency markets. The upshot will be greater competition, a rough time for both firms on occasion, but in the end, not much will change based on business decisions. Politics is another matter, though.
Reuters has been accused of being reactive and lazy by some shareholders and commentators. Bloomberg's great advantage here is its ability to leverage its fixed income strength. However, the reverse is true; Reuters could certainly enter the fixed income market.
Perversely, the situation does not revolve around the business plan of either company. Bloomberg's success hinges largely on who the next mayor of New York City is. Should Mike Bloomberg win re-election, Reuters will not face the same challenge as it will should he not repeat as mayor.
Mr. Bloomberg has been a great success in business, less so in politics. It would seem that after being turfed out of office by an angry electorate (and that describes a majority of New Yorkers today), he would turn his attention to things he understands better than municipal politics -- namely business information. All politics is local, and all business, it seems, is politics.