A major index of emerging market currencies has hit its strongest level on record, as the dollar’s recent weakness magnifies the positive impact of wider optimism about global growth prospects.
The dollar is once again on its back foot with traders mulling differing statements from Donald Trump and other senior US officials on America’s stance on the dollar.
Mario Draghi, the president of the European Central Bank, took aim at the Trump administration for talking down the dollar, accusing it of flouting international rules to prevent currency wars.
The pound rose after Britain’s economy unexpectedly picked up speed in the last three months of 2017, adding to the view that the hit from the Brexit vote was not as bad as expected.
Some of the world’s biggest investors are betting on a sustained recovery in the pound, confident that Britain will avoid a disorderly crash out of the European Union and that the Bank of England will hike interest rates more than previously expected.
The euro jumped more than half a percent higher as comments by senior US officials this week advocating their support for a weak dollar reverberated through currency markets.
UBS Wealth Management upgraded its six-month forecasts for the euro and sterling after upgrading its short-term forecasts earlier this week, citing protracted dollar weakness.
New data from the Futures Industry Association (FIA) highlights the lack of significant growth in the volume of FX futures trading over the past several years.
Semi-annual surveys of seven major central banks show FX activity in the US and UK rising by 7%.
Barclays Chief Executive Officer Jes Staley told British Prime Minister Theresa May to be prepared to sacrifice access to the single European market after Brexit if it means gaining control of its own financial rules, people with knowledge of the discussions said.
- JPMorgan Chief Dimon: Macron Might Have Averted Brexit – Financial News
- Goldman Sachs Boss Warns on Irreversible Brexit Plans – BBC
UBS Group said it’s planning to keep the maximum amount of jobs and business in the UK as the country works towards a solution with European authorities on its exit from the trading block.
At Davos, financial chiefs are upbeat about the markets, and that is what has them worried.
In the current political environment, the idea that a dozen senators from the minority would join Republicans to support a limited bill to ease certain Dodd-Frank Act restrictions seems unusual.
UK Prime Minister Theresa May has promised to consider clamping down on bitcoin as she raised concerns that cryptocurrencies are being used by criminals.
- Central Bank in Africa’s Top Bitcoin Market Warns of ‘Gamble’ – Bloomberg
- Banning Crypto Trading Is “Extreme”: Thai SEC – FOW (subscription)
As Nordea Bank’s bitcoin ban for staff has unions questioning the legality of the move, Sweden’s minister in charge of financial legislation says it’s understandable that the industry is resorting to such measures.
CME Group announces that three of the larger FCMs in the market – Citi, Credit Suisse and Morgan Stanley – have started to clear NDFs for their clients at CME.
State Street, the world’s second-largest custody bank, is considering safeguarding clients’ digital assets in a move that would see it become the first major global bank to provide services for bitcoin-related investments.
Global spending on blockchain solutions is expected to reach $2.1 billion in 2018, more than double of the $945 million spent in 2017, a new report from market research firm International Data Corporation (IDC) shows.
Most emerging Asian currencies edged up, with the dollar reviving after US President Donald Trump said he wanted a “strong dollar”, but market participants were sceptical it would be enough to change the currency’s recent weak trend.
The yuan touched its strongest level against the US dollar since a surprise devaluation in August 2015, before reversing some in late Asian trading hours as the dollar rebounded broadly.
Brazil’s real is basking in a 16-week high, boosted by the weak dollar environment and a court ruling that looks fatal for the chances of a political comeback by ex-president Luiz Inácio Lula da Silva in the October elections.