The People’s Bank of China set the trading band for the renminbi against the dollar weaker again as the US currency continued to strengthen in the wake of the Federal Reserve’s rate rise.
- China Yuan Weakness Prompts Support Measures – CNBC
- It’s Turning Into a Really Bad Week for China’s Markets – Bloomberg
The US Federal Reserve increased interest rates by a quarter point today, also indicating that it now expects to increase rates three more times in 2017.
- Dollar at 14-Year Peak as Fed Rejuvenates Trump-Rally, Emerging FX on Back Foot – Reuters
- US Currency Soars to 14-Year High After Fed’s Interest-Rate Decision – Wall Street Journal (subscription)
The dollar was steady in the run in to the Federal Reserve’s policy statement later in the day, with an almost one percent fall this week showing minimal expectations the Fed will ramp up its forecasts for future rises in interest rates. Read More
The three banks have cooperated to provide evidence of a potential new antitrust conspiracy in the currency spot market that prosecutors say involves different currencies than the ones at the center of their 2015 guilty pleas. Read More
A Citigroup currency trader in Tokyo who sued the US bank after it fired him for allegedly trying to manipulate foreign-exchange rates has settled the case. Read More
The European Central Bank (ECB) has decided to hold interest rates steady, with market participants predicting further euro weakness.
- Euro Steadies After Biggest Fall Since Brexit Vote – Reuters
- Confusion Reigns in Markets as ECB QE Changes Spark Wild Swings – Bloomberg
- Pound Sterling to Euro Tests Best Exchange Rate @ 1.19 as Super Mario Reduces Monthly QE – Exchange Rates
The US Commodity Futures Trading Commission (CFTC) has fined Société Générale $450,000 for failures in the reporting of certain FX transactions. Read More
Citi said that its trading operations functioned appropriately in a thin and illiquid market during October’s “flash crash” in sterling, responding to a Financial Times report that a trader at the US bank exacerbated the pound’s fall.
- Citi Trader Deepened October’s Pound ‘Flash Crash’ – Financial Times (subscription)
- Report Targets Citi’s Role in Sterling Flash Crash – Profit & Loss
Anyone checking the exchange rate between China’s renminbi and the US dollar would have got a shock early on Tuesday when an apparent glitch resulted in quotes shown on Google and at least two other currency exchange websites showing an eight per cent devaluation.
- Icap Glitch Showing Yuan Plunging 8.8% Fuels Trader Jitters – Bloomberg
- A London Trader May Have (Momentarily) Turned Trump’s Lie About China’s Falling Currency into Reality – Quartz
- Rumors of Sharp Drop in China’s Yuan Swirl on Social Media – CNBC
The euro rebounded from 21-month lows, clawing back almost all the ground it had lost overnight after Italian Prime Minister Matteo Renzi conceded defeat in a referendum on plans to reform the country’s constitution and said he would resign.
- Euro Slides as Italy Rejects Constitutional Change – Profit & Loss
- Euro Falls to 21-Month Low Against Dollar After Italy’s ‘No’ Vote, then Pares Losses – Market Watch