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Why Liquidity is Drying Up in the Currency Market

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Why Liquidity is Drying Up in the Currency Market – MarketWatch
As volatility in the foreign exchange market has risen over the past eight months, currency traders are finding that liquidity has become much patchier than it once was. Several factors, including traders’ increasing reliance on algorithmic trading, the extreme lop-sidedness of the market’s positioning, and reluctance by market makers to take the losing side of the trade are sopping up liquidity in the market when it‘s most needed.

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Dollar Drop is Worst Since 2011 as Investors Rethink Fed Policy

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Dollar Drop is Worst Since 2011 as Investors Rethink Fed Policy – Bloomberg
The dollar slumped the most since October 2011 after the Federal Reserve reduced projections for interest rate increases and expressed concern the dollar’s surge is weighing on exports and inflation.

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Fed’s Nod to Currency Wars Fuels Second Guessing by Dollar Bulls

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Fed’s Nod to Currency Wars Fuels Second Guessing by Dollar Bulls –Bloomberg
The Federal Reserve chair, Janet Yellen, acknowledged the negative consequences of this year’s gains Wednesday, saying the currency is weighing on US exports and inflation as policy makers pared back their outlook for interest rate increases. That sent the greenback down by the most since 2009, though it rebounded Thursday to continue its rally of 14% over the past six months.

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Citi, Barclays Close to Settling FX Lawsuit With Private Investors

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Citi, Barclays Close to Settling FX Lawsuit With Private Investors – Wall Street Journal (subscription)
Citi and Barclays are expected to pay as much as $800 million combined to settle a lawsuit with investors who say the banks manipulated foreign exchange rates, according to people close to the situation. The payments are likely to be more than double those made by JP Morgan and UBS, which have already settled their parts of the same suit.
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Hopes Quashed of Two-Year Delay for New Swaps Rules – Financial Times

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Hopes Quashed of Two-Year Delay for New Swaps Rules – Financial Times (subscription)
The world’s largest swap dealers may have only a few extra months to comply with new rules for swaps that cannot be processed through clearing houses, disappointing banks’ hopes of a two year delay, the top US derivatives regulator said. The CFTC is in the process of formalising rules regarding margin for the estimated $170tn in notional value of uncleared trades that are still expected to be left in the market, including cross-currency swaps, swaptions and inflation swaps.
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