Top Headlines

Citigroup Currency Trader Settles Tokyo Wrongful-Dismissal Case – Bloomberg

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.

BIS Report Sees FX Shift to Relationship Trading – Profit & Loss

The latest Bank for International Settlements Quarterly Report carries a paper, Downsized FX Markets: Causes and Implications, which suggests that amongst the many structural shifts taking place in FX markets, a move towards relationship trading is underway.

Dollar Stands Tall as Investors Await This Week’s Fed Meeting – Reuters

The dollar inched higher ahead of the US Federal Reserve’s meeting that was expected to deliver an interest rate hike as well as clues to future monetary policy, while the euro remained under pressure after the European Central Bank’s dovish moves last week.

Speculators Hike US Dollar Bets to Early January Level – CFTC  – Reuters

Speculators increased positive bets on the US dollar for a third straight week, pushing net longs to their highest since early January.

Sterling Rises as Busy UK Data, Policy Week Gets Under Way – Reuters

Sterling edged up, recovering some ground lost last week as investors braced for what is shaping up to be a busy week with the latest top-tier UK economic data releases and Bank of England policy meeting.

ECB Delivering a Dovish Taper Reinforces Bets on Euro Parity – Bloomberg

The European Central Bank’s latest policy decision is reinforcing calls for the euro to drop to parity against the dollar.

FCA Looks at Algos as Citigroup Pound Flash Crash Probe Heats Up – Bloomberg

The head of the UK Financial Conduct Authority said his agency will look at how firms use algorithms in currency trading as a probe into the pound’s October flash crash intensifies, with regulators summoning Citigroup to discuss its possible role in the incident, according to people with knowledge of the situation.

China to Launch Direct Yuan Trading with Seven Currencies – Reuters

China has agreed to establish direct trading between its yuan currency and seven foreign currencies, the China foreign exchange trading platform operator said.

China’s Stocks, Bonds, Yuan Slump in Unison on Liquidity Concern – Bloomberg

Unease is once again permeating China’s financial markets.

Dollar Hits Ten-Month High vs Yen as Oil Spurs Reflation Bets – Reuters

The dollar rose to its highest since February against the yen as US bond yields climbed on the back of expectations of broadly higher inflation, driven by a five percent rise in global oil prices.

The Most Useless Statistic of the Year – Profit & Loss

Non-farm payrolls, Australian employment report, berry picking… so many data sets for FX traders, but which is the most pointless?

Scandalous Past Still Haunts Forex Industry – Financial Times (subscription)

Three years after regulators unearthed widespread evidence that traders at the world’s biggest banks had been manipulating foreign exchange benchmarks, the industry is hoping the safeguards it has since put in place will limit further wrongdoing.

Regulatory News

Is Regulation Causing Flash Crashes? – Profit & Loss

New regulations imposed on banks since the financial crisis could be contributing to “flash crashes”, according to Christopher Giancarlo, a Commissioner at the Commodity Futures Trading Commission.

FCA Fines Slump to Lowest Level Since Financial Crisis – Money Marketing

Financial services fines have fallen to their lowest annual level since 2007 but FCA chief executive Andrew Bailey argues this does not mean the regulator is going soft on banks.

Currency Springs Central Bank Trap as Iceland Risks Overheating – Bloomberg

Economics text books would probably recommend against cutting interest rates in a country that’s growing at a supercharged pace of almost five percent, where wages are soaring at more than double that rate and unemployment is virtually non-existent.

Blockchain Lures Central Banks as Danes Consider Minting E-Krone – Bloomberg

There’s a growing number of central banks questioning the point of printing paper money.

Azerbaijan Plans to Switch to Floating Currency Rate in 2017 – Reuters

Azerbaijan plans to move to full floating rate of the manat currency, starting from 2017, Azeri Central bank head Elman Rustamov told reporters.

Tokyo-Seoul Currency Swap Deal Unlikely Until Next Year, Korean Deputy Says – The Japan Times

The governments of Japan and South Korea are unlikely to conclude their negotiations on a fresh currency swap deal by the end of the year, South Korean Deputy Prime Minister Yoo Il-ho has said.

Company News 

State Street Hires for Sales – Profit & Loss

Mischa Irsch has joined State Street Global Markets in Boston as an FX sales trader.

Integral Includes Linedata’s OMS to InvestorFX Platform – FX Week (subscription)

The integration is expected to give Linedata’s asset manager clients access to better netting and execution.

Citi Raises $4 million for Charities Through e-for Education Programme – Profit & Loss

Citi’s fourth annual ‘E for Education’ charity campaign has raised $4 million for education-focused charities.

Market Savvy

Asian Currencies Ease Against Dollar Ahead of Fed Meeting – Reuters

Asian currencies eased against the dollar as investors awaited this week’s Federal Reserve policy meeting for hints on the possible pace of US monetary tightening next year.

Lira Leads Drop in Emerging Currencies as Russian Markets Rally – Bloomberg

The lira led declines among emerging-market currencies after data showed Turkey’s economy shrank for the first time in seven years.

Leu Eases After Social Democrats Win Romanian Election – Reuters

Romania’s leu eased while other Central European currencies firmed while Bucharest stocks rose after the leftist Social Democrats won a parliamentary election there on Sunday.