Trading
Sharp moves hit 3m forecasts
The past three months have been one of the most difficult for forecasting quarterly currency moves since the FX Week Currency Forecasts Index launched at the start of this year.
Bloomberg and Cognotec partner on streaming rates
LONDON – Bloomberg is bringing streaming FX rates to users of its Bloomberg Professional terminals, courtesy of a joint venture with FX vendor Cognotec, the two firms will announce today (August 2).
Dollar vol could be back
LONDON – The global currency markets could be in for a bout of unseasonal volatility and trading activity if the US dollar breaks through its recent range against the euro, traders said last week.
US equity markets to lead dollar path
US equity market performance will become critical for the dollar, say Neil Mellor and Simon Derrick, currency strategists at Bank of New York in London
Billiton transfers forex to Europe
MELBOURNE – Australian banks in the UK could see added flow going through their FX dealing desks later this year, when the world's largest mining company transfers its remaining forex trading from Melbourne to Europe.
IGM calls Swissie's 3m rise
The Swiss franc appreciated more than 5% over the past three months, as disappointing eurozone data made it a better comparative bet than euro against the sinking dollar. The Swiss National Bank's surprise June 16 interest rate hike, and much better than…
Making amends for seasonal trends
Lower volatility and range-bound markets call for capital preservation with enhanced yields during the summer, says Jeffrey Lins, director of quantitative analysis at Saxo Bank in Copenhagen
Is sterling heading for a fall?
Falling UK corporate profitability and a new cable high spurs memories of 1992 and Black Monday, says Hans Redeker, global head of FX strategy at BNP Paribas in London
Yuan convertibility moves a step closer
BEIJING – China took another step closer to yuan convertibility last week with an announcement that it is further liberalising non-trade related currency transactions. From August, more multi-national firms throughout the People’s Republic will be able…
Selling options to resolve carry trade dilemma
Clients are putting off dollar/yen carry trades until the yen appreciates. But by selling options on cross-currency swaps, clients could earn money while waiting for the Japanese unit to reach a level more suitable for a carry trade, says Phileas Wong,…
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…
EBS Live doubles data delivery frequency
LONDON – Electronic broker EBS last week announced an enhancement to its recently launched direct data feed EBS Live to double the frequency of its FX spot rate ‘time slices’ to 500 milliseconds.
Structured euro deposit adds cash as it hedges
A structured deposit denominated in euro can fulfill the twin goals of a European company by hedging its US dollar payables and generating a cash-rich position in its functional currency, says Didier Meyer, FX structurer at SG Corporate and Investment…
Central bank financing down
Foreign central bank financing of the US trade deficit is now below 30%. This means the quality of financing of the US structural deficit continues to deteriorate and pressure to sell the dollar will intensify, says Chris Turner, senior partner for FX at…
Rupiah vol ahead as elections continue
JAKARTA – The Indonesian rupiah continued to rise last week, hitting 9,000 against the dollar following a smooth first round to the country’s first-ever presidential elections. But market participants are wary of the medium-term outlook as the country…
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.
Hedge and gain during euro/dollar volatility
A six-month ‘volatile forward’ can help a firm hedge safely while also benefiting from a choppy euro/dollar market, say Eric Ohayon, European head of FX structuring, and Chris Weiss, FX structurer at Bank of America in London
Property pressures the pound
As UK property price growth slows, investors are moderating their view on the Bank of England tightening cycle. This could add to sterling weakness, says Adam Myers at SG CIB in London
Consistency offers rewards
Few forecasters have been successful at both one-month and three-month currency forecasting over the past three months, our Index reveals. Only Westpac (top three-month forecaster and 10th place one-month forecaster) and Bank of Nova Scotia (6th place…
Dollar set to depreciate
Net capital inflows will exceed the US current account deficit over the next year, prompting dollar depreciation to begin again, says Jay Bryson, economics analyst at Wachovia Bank in Charlotte, North Carolina
HSBC reverses its fortunes
HSBC, which last month was languishing near the bottom of the FX Week Currency Forecasts Index, is this week the top one-month forecaster. The bank's aggregated majors forecasts, submitted May 21 and tested against spot on June 21, were out by just over…
How to make yen gains amid intervention fears
A currency overlay manager may wish to take advantage of fresh yen strength without being exposed to the impact of renewed intervention. Simon Derrick, head of Bank of New York's currency strategy team, describes a simple, low-cost way to express this…
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.
Boosting dollar returns during euro strength
To boost returns on a US dollar deposit in a bullish euro environment, a European exporter would be wise to consider an FX tarn with conversion, says Christophe Bouculat, senior FX structurer at Calyon in Paris