Trading
The zero-cost double KO/KI forward
A double knock-out/knock-in forward may provide a Mexican manufacturer with an effective zero-cost hedge, say Vincent Lee and Richard Stang, vice-presidents in FX sales at TD Securities in Toronto
NZ ups reserves as "insurance"
WELLINGTON -- The Reserve Bank of New Zealand (RBNZ) is proposing to enhance its capacity to intervene in FX markets. The central bank wants to increase the amount of foreign currency reserves it holds as "insurance" against a non-convertible Kiwi dollar…
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.
Aussie hits a high
The Aussie dollar looks set to be the one of the main beneficiaries from continued central bank currency intervention in Asia, argues Robert Rennie (right), chief currency analyst at Westpac in Sydney
Investment banks break records
NEW YORK -- This year looks set to be a record-breaker for banks' FX earnings, if the commercial banks follow the lead set by the US investment houses.
EBS sees fruit of 'sustained effort on sterling'
LONDON -- Spot broker EBS last week quantified the success of its initiative to build sterling volumes on its platform.
Are long-dated options correctly priced?
Options pricing is based on a flawed model of market efficiency. This is why market-makers and hedgers might see the same volatility as cheap or expensive, depending on their viewpoint, says Gilles Bransbourg, head of European FX sales at Bear Stearns in…
Volatility and leverage key for Euro importer
Trading volatility allows a European importer to improve its dollar buying rate and mitigate Asian strengthening says Silash Ruparell in European FX sales at Lehman Brothers in London
Banks add NDFs to e-trading tools
LONDON -- Royal Bank of Scotland, Barclays Capital and Standard Chartered are planning to launch electronic trading of non-deliverable forwards (NDFs) this year, chasing market leaders in the field such as Dresdner Kleinwort Wasserstein and Deutsche Bank.
Cancellable forward beats dollar pendulum
Cancellable forward contracts offer corporates a cheap way of protecting against volatile dollar receivables says Anders Kjaer Jensen, FX strategist at Nordea in Copenhagen
Portfolio flows and the dollar’s outlook
The pace of the dollar’s decline appears to have returned to more sustainable levels, says Michael Woolfolk, senior currency strategist at The Bank of New York
Falling rates spell kroner/krona opportunities
The Norwegian kroner is being supported by oil prices and carry-trade liquidation, but these factors will force the Norges Bank to slash rates. This provides the opportunity for short-term tactical trades against the Swedish krona, says Hans-Guenter…
Dual currency forwards to the rescue
Dual currency forwards can offer tangible benefits if used wisely, says Standard Chartered’s Charlie Brown, global head of structuring in London, and Michael Image, structurer for Northeast Asia, in Hong Kong
Rotation in reflation trades
Inflation is driving the UK to raise interest rates while other nations are set to cut rates to drive growth. These rate differentials provide opportunities for return says Monica Fan, head of European FX strategy at RBC Capital Markets in London
Correlation for hedging and speculation
One of the most surprising FX developments in the past year has been the re-emergence of the use of correlation products. Ade Odunsi, a director in Merrill Lynch’s FX risk advisory group in New York, suggests two such solutions for a hedging and a…
Emerging FX takes off online
LONDON -- Increasing demand from both corporate and hedge fund clients for the ability to trade emerging markets (EM) currencies online is leading banks to boost their e-trading offerings in this area, senior officials told FX Week .