The dollar rose across the board, as lingering global trade tensions prompted traders to ditch most high-yielding currencies and investors focused on expectations the Federal Reserve will continue to raise interest rates.
The euro rebounded as concerns about an escalating trade conflict held back the dollar, while traders said markets needed clarity on a developing political crisis in Germany and an EU summit before pushing the euro higher.
The pound fell to an 11-day low versus the euro as traders positioned for a speech by the Bank of England’s governor, hoping for further clues as to whether the central bank will raise interest rates this year.
China’s central bank appeared to intervene to stem the yuan’s decline, traders said, after it had earlier set the currency at a six-month low against the US dollar.
- Renminbi Weakens Past Rmb6.6 per Dollar – Financial Times (subscription)
- China’s Yuan Drop Blindsides Traders, Spurs Worry on Impact – Bloomberg
Former HSBC currency boss Mark Johnson, the first person convicted in a global crackdown on foreign-exchange rigging, was freed from US custody and allowed to return home to the UK as he pursues an appeal.
Financial markets are prone to knee-jerk reactions, which means currency investors often overreact to geopolitical events.
The proportion of users and volume trading electronically have remained steady for the last four years, and FX e-trading appears to have reached an equilibrium level.
The European Union’s default market access for foreign financial firms will not be eased for Britain after Brexit and improvements to the equivalence regime will apply to all third countries, an EU official told Reuters.
- Banks Are Playing Chicken with Brexit – Wall Street Journal (subscription)
- Bank of America Shifts Senior London Trading Trio to Paris – Financial News (subscription)
The Federal Reserve is moving toward eliminating passing and failing grades for its stress tests of the nation’s largest banks, replacing them with a capital ratio that the lender must meet during the following year.
The meltdown in Bitcoin is weighing on more than the biggest cryptocurrency.
Central bank digital currencies could pave the way for a more stable financial system, suggests a report prepared for the European Parliament’s Economic and Monetary Affairs Committee.
Matt Ardizzone has joined Mercury Exchange, a new digital asset exchange, as head of liquidity and relationship management.
London based Archax is targeting institutional investors with the launch of an exchange for digital assets, which is being positioned as different to existing exchanges that predominantly target retail investors, and which has drawn seeding capital from the Alphabit fund.
Last Friday, Japan’s Financial regulator sprinkled six anti-money-laundering business improvement orders over some of the country’s biggest cryptocurrency exchanges — all of which it had carefully and prominently licensed only nine months ago.
BNY Mellon has launched its FX options desk, enabling clients to better hedge currency exposure and express their views on the future direction of FX markets.
DeepWell Liquidity Management, an agency broker owned by Swiss interdealer Tradition, has made seven senior managers to spearhead its push into global forex and fixed income trading as banks retreat from markets they once monopolised.
Cobalt, the shared back and middle office FX infrastructure provider, has unveiled its new credit management platform.
Neiman is the company’s latest senior hire, and will be responsible for the expansion of its FX electronic communications network (ECN) business.
The New Zealand dollar was trading at its lowest level in 2018 after a closely-watched survey showed a major dent in business confidence, signalling slower growth.
Turkish president has unprecedented new powers but must contend with frail lira.