Trading

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.

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…

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.

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 .

Near-term ringgit peg change unlikely

KUALA LUMPUR -- Despite recent reported comments from Malaysia’s second finance minister, Tan Sri Nor Mohamed Yakcop, Malaysia is unlikely to change the ringgit’s current peg to the US dollar -- at least until the country’s general election is over.

FX smashes $600m hole in Anglo accounts

LONDON -- The cost of failing to hedge FX risk was brought into sharp focus last week, when mining firm Anglo American said its 2003 earnings were down nearly $600 million as a result of currency movements.

Hedging dollar dividends back to euro

A European company seeking to protect dividends received from a US subsidiary can benefit from the current inverted volatility term structure in the FX options market. UBS’s FX Solutions group explains how

Reuters to launch FX swaps

LONDON -- Reuters is to expand its foreign exchange product range by launching FX swaps on its Reuters Dealing 3000 matching platform next month, a senior official said last week.

Benchmarking against competitive exchange rates

The dollar decline has led to competitive divergences between those currencies that tag the dollar and those that have suffered. This is likely to bring increased FX volatility, says Peter Luxton, economic adviser at Informa Global Markets in London

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