Risk management
Hedge funds to rethink strategy
LONDON – Large numbers of hedge funds drawn to the FX market over the past year are likely to modify trend-driven FX trading, after being stung by heavy losses this year.
Protecting speculative trade management positions
Some clients will have specific views on the future movements of currencies to which they have exposure. UBS's global FX solutions group shows how barrier strategies can be used to limit risk on these positions
NAB to re-open options desk
MELBOURNE – National Australia Bank hopes to re-open its currency options desk in the "near-term", said chairman Graham Kraehe last week. However, the bank refused to be drawn on a date, saying it was up to regulator the Australian Prudential Regulation…
Rankings reveal diversifying inter-dealer market
The inter-dealer market for foreign exchange is shrinking, as an increasing number of mid-tier players retreat from market-making to become clients of the top firms. The banks that remain are working hard to consolidate their positions as liquidity…
Pension funds scramble for FX management
LONDON – UK pension funds' demand for foreign exchange management has gone through the roof over the past year, as trustees and managers seek to limit risk and improve returns.
CSAM to add emerging markets to FX management
LONDON – Credit Suisse Asset Management (CSAM) is looking to add emerging market currencies to its suite of forex management services from early next year.
Dollar/yen break-out expected
TOKYO – Technical indicators suggest dollar/yen could be set to break out of the tight trading range it has been trapped in since June. "Resistance is declining and support is rising. We will get a decent break-out trade soon," said Karen Griffith, head…
China eases restrictions on capital account
BEIJING – The Chinese government made further steps towards liberalising the capital account last Wednesday by allowing insurance companies to invest 80% of foreign exchange assets overseas.
Toyota reports ¥70bn FX impact
TOKYO – Japanese car manufacturer Toyota Motor Corporation last week announced a ¥70 billion ($645 million) hit from exchange rate changes affecting its first quarter operating income.
FXC issues broker points rules
NEW YORK – The Foreign Exchange Committee, a US industry association affiliated to the Federal Reserve, last week issued new guidelines on broker ‘points’ – the issue at the heart of last year’s massive Wall Street forex fraud.
US banks still seeing record earnings
NEW YORK – Record earnings from foreign exchange continued into the first half, according to US banks’ financial results published last week. Citigroup, State Street and Bank of America all reported new highs in their FX or trading results, as currency…
Baltics, Slovenia set for early euro adoption
LONDON – Estonia, Lithuania and Slovenia are likely to be the first of the new European Union member states to adopt the euro, Fitch Ratings said last week.
Rivals gear up for FX clearing
LONDON – The stage is set for a central counterparty clearing (CCP) system for FX as two potential providers moved their plans forward last week.
Tax bill to bring the dollars home
NEW YORK – A new tax bill in the US that is likely to herald a massive repatriation of funds into the country could spell a 5%–10% hike for the dollar, according to one scenario model from Dutch bank ABN Amro.
Overlay staff in short supply
NEW YORK – Demand for currency overlay is outstripping the supply of available managers, as the boom in investors managing currency continues.
CME and Reuters pool liquidity
LONDON – Trading systems vendor Reuters and the Chicago Mercantile Exchange are bringing together their pools of buy-side and sell-side liquidity in what may be the first move towards an exchange model for the FX market.
CLS is 'changing the front-office'
LONDON – The continuous-linked settlement (CLS) service for FX trades has changed credit and trading practices among the majority of its users, reveals research from IT consultancy TowerGroup to be published this week.
Advanced IRB Basel II approach delayed
BASEL – The Basel Committee on Banking Supervision has said that implementation of the advanced internal ratings-based approach (IRB) for credit risk and the advanced measurement approach (AMA) for operational risk will be delayed until the end of 2007…
NAB options desk "open again"
MELBOURNE – National Australia Bank (NAB) has resumed limited trading in currency options, as an April 30 deadline to amend its shortcomings passed last week.
Central counterparty clearing on the way
LONDON – LCH.Clearnet is planning to launch the first central counterparty clearing service for foreign exchange, in a move that could challenge the role of continuous-linked settlement (CLS).
Mid-tier clients pile into rupee options
MUMBAI -- FX options use in India is extending to more mid-market customers, nine months on from the liberalisation of rupee options, local market participants told FX Week .
NAB "collusive broker" speculation grows
MELBOURNE -- Cantor Fitzgerald last week refused to comment on growing speculation that it is the broker referred to in two reports into National Australia Bank’s A$360 million (US$280 million) forex options losses.
Watchdog savages NAB
MELBOURNE -- National Australia Bank’s currency options desk will remain closed until it has satisfied requirements issued by its regulator in a damning report released last week.
Calyon names regional managers
PARIS -- Calyon, the group to be formed from the merger of Crédit Agricole Indosuez (CAI) and Crédit Lyonnais (CL) on April 30, has agreed the structure of its global spot FX business and appointed regional heads, a senior official said last week.