Top Headlines

ECB Encourages Commitment to Global Code by May 2018 – Profit & Loss

The European Central Bank (ECB) is publicly endorsing the statement of Commitment set out in the FX Global Code of Conduct and is encouraging FX trading counterparties to do the same.

FXPA Gets Behind the FX Global Code – Profit & Loss (subscription)

The Foreign Exchange Professionals Association (FXPA) will be promoting the FX Global Code of Conduct given that it addresses so many issues that the association has already been working on, according to its chairman.

UK Drives FX Turnover Growth – Profit & Loss

Foreign exchange turnover rose in April 2017 compared to October and April 2016 thanks mainly to a surge in activity in the UK.

Dollar at 14-Month Low on Dovish Signals from Fed – Financial Times (subscription)

The dollar slid to a 14-month low and Wall Street stocks hit new highs after a dovish tone from the Federal Reserve allowed investors to push back rate rise bets and extend the recent risk-taking mood.

Sterling’s Compass Shifts from Brexit to Economy – Financial Times (subscription)

The more sombre mood over the UK economic outlook is expected to keep sterling traders in a similar frame of mind for the remainder of the quarter, with analysts forecasting that any Brexit developments are unlikely to shift the currency from its narrow range.

Euro and Sterling Rise Against Dollar After Dovish Fed Meeting – Financial Times (subscription)

The euro has hit its highest level for more than two years and sterling is trading around its highest since last September, after Wednesday’s dovish Federal Reserve meeting pushed the dollar to a 14-month low.

Renminbi Reaches New High for 2017 – Financial Times (subscription)

The renminbi has gained further on the dollar in the wake of comments from the US Federal Reserve, pushing the Chinese currency to a new record level for the year to date.

Swiss Franc Sinks to 18-Month Low Against Euro – Financial Times (subscription)

The Swiss franc dropped to its lowest level against the euro in 18 months, following a drop of 1.5 per cent in two days to trade as low as 1.1176, approaching the nadir set since the central back abandoned attempts to impose a currency floor in January 2015.

Outlook for Asia’s Worst-Performing Currency Gets Grimmer – Bloomberg

The outlook for the Philippine peso – Asia’s worst-performing currency – just keeps getting grimmer.

US Indicts Suspected Russian ‘Mastermind’ of $4 Billion Bitcoin Laundering Scheme – Reuters

A US jury indicted a Russian man on Wednesday as the operator of a digital currency exchange he allegedly used to launder more than $4 billion for people involved in crimes ranging from computer hacking to drug trafficking.

Post-Trade Utilities Struggle to Gain Momentum – Euromoney

FX industry utilities have been described as a mechanism for substantially reducing post-trade costs, but while market participants are interested in the potential efficiencies they offer, enthusiasm for implementing such solutions remains patchy.

Last Look in Numbers – Profit & Loss (subscription)

My numbers here are theoretical, although in reality they are unlikely to be too far removed from the reality, so here we go.

Regulatory News

Fed Nominee Quarles: Bank Rules Need ‘Refinements’ – Wall Street Journal (subscription)

Postcrisis bank rules have made the financial system safer but need “some refinements,” President Donald Trump’s pick to become the Federal Reserve’s point person on financial regulation plans to tell Senate lawmakers Thursday.

EU Prop Firm Capital Crunch Could Hit Market Liquidity – Risk (subscription)

Traders claim they would be put out of business by bank-style capital rules.

FCA Extends Crackdown on Senior Managers – Financial Times (subscription)

The senior managers regime, which previously only applied to banks, building societies and insurers, will be widened to cover all parts of the financial services industry.

BOE Says EU Bank-Failure Bill May Hinder Too-Big-to-Fail Fix – Bloomberg

The Bank of England took aim at a European Union plan to boost supervisors’ powers to stop cash leaving ailing lenders, adding its weight to mounting criticism of a bill intended to make sure big banks can be wound down without wreaking havoc on the economy.

Digital-Coin Companies Shrug Off SEC Scrutiny – Wall Street Journal (subscription)

Some companies planning sales of digital coins said they wouldn’t be deterred by the Securities and Exchange Commission’s plans to restrain the hot, new fundraising method, possibly setting up a showdown with US regulators.

Company News

XTX Warns Mifid II Risks Spreading Bad FX Habits to Equities – Financial News (subscription)

Foreign exchange veteran warns the controversial systematic internalisers regime could make equities markets fragmented and less liquid.

Integral Enhances OCX – Profit & Loss

Integral has announced new enhancements to its Open Currency Exchange (OCX).

Santander Partners with BiBox on FinTech – Profit & Loss

BiBox is partnering with Santander Global Corporate Banking to focus on fast-paced integration of fintech solutions into the bank.

CME to Offer Repo-Backed Futures and Options – Reuters

The CME Group said that it will develop futures and options based on the repurchase agreement market, after a bank committee in June selected a benchmark repo rate to be used as an alternative to Libor in derivatives transactions.

Market Savvy

Australian Dollar Passes $0.80; Euro Steady Above $1.17 – Financial Times (subscription)

The Australian dollar joined the euro at a more than two-plus year high against the US dollar after the Federal Reserve signalled it was ready to start reducing its balance sheet “relatively soon”, but also failed to deliver a strong note of the hawkishness needed to bake in expectations for further near-term rate rises.

Asian Currencies Rally on Fed Inflation View; China Yuan at Nine-Month High – Reuters

Asian currencies rallied as the US Federal Reserve’s cautious inflation assessment sent the dollar to 13-month lows and rekindled interest in emerging markets, with the Chinese yuan surging to a more than nine-month high.

Zloty Falls on Politics, Czech Bill Auction Watched – Reuters

The zloty eased, under pressure from political tension over Poland’s reforms of its judiciary, while more dovish than expected comments from the US Federal Reserve underpinned other Central European currencies.