Fast FX Moves Raise Liquidity Worries – Financial Times (subscription)
In recent months a series of dramatic and unforeseen intraday fluctuations – even in popular and widely traded currencies – has led FX investors, bank traders and analysts to question the mechanics of the market. At its heart is a question of whether the vast over-the-counter market is in a cyclical decline or just the latest to be affected by new technology and tough regulation enforcing change. The broader concern is that declining liquidity will fuel more sudden FX moves and destabilise the market.
UK Treasury Urges BoE to Consider Time Stamps for FX Trades – Financial Times (subscription)
The Bank of England is being urged by the UK Treasury to consider requiring time stamps for all foreign exchange trades as part of reforms that proponents say would help prevent banks from defrauding clients, according to people familiar with the issue.
Aussie Jumps More than 1% as RBA Keeps Rates Unchanged – Reuters
The Australian dollar gained more than 1% against the US dollar, on track for its biggest daily rise in more than two weeks, after the Reserve Bank of Australia surprised many investors by refraining from cutting interest rates.
Door Open to Rate Cuts in Australia, India After Pause Tuesday – Bloomberg
Economists expect further cuts in interest rates in Australia and India after the central banks of the two nations kept monetary policy unchanged on Tuesday.
Aussie Moving Before RBA Third Month Spurs Regulator’s Probe – Bloomberg
Australia’s securities regulator will investigate today’s surge in the local dollar that came before a monetary policy statement. It’s the third such currency move in as many central bank meetings.
BlackRock Chief Larry Fink Warns on Strong US Dollar – Financial Times (subscription)
The steep rise in the US dollar risks undermining business confidence in the US and sending the country’s economy into a slowdown, the head of the world’s largest asset management firm is warning.
Dollar Recovering as Jobs Shock Fades – Reuters
The dollar held firm in Asia on Tuesday, having recovered almost all of its payroll-inspired losses.
Swiss Hold Policy Line After Franc Shock Risking Deflation – Bloomberg
Swiss National Bank President Thomas Jordan may have decided that one cataclysmic market shock is enough for now.
Russian Ruble Seen as World’s Best Performing Currency, Hits 2015 High – RT
The Russian ruble has hit 55.3 to the dollar Monday, its highest value this year. The currency has become the best performer during the first three months of the year, after it finished 2014 as one of the biggest losers.
ETFs That Hedge for Currency Risk – Wall Street Journal (subscription)
Investors have rushed into currency-hedged ETFs that invest in stocks in developed markets outside the US, but is the tactic worth it? Primarily focused on Japan and the eurozone, investors this year have put $23.5 billion into exchange-traded funds that lock in a current exchange-rate range to protect against dollar depreciation.
Are Currency Swings Worth the Worrying? – Wall Street Journal (subscription)
Most mutual-fund investors pay little attention to swings in exchange rates, but for investors in international stock or bond funds, recent moves in the currency markets have been hard to ignore. The question for investors: Should they do anything about it?
Greece Brightens, Brazil Darkens – Bloomberg
Greece and Brazil are both synonyms for economic dysfunction. So why do investors think Greece is becoming a respectable bet while Brazil remains a lousy one? Here’s a partial answer: the euro. Greece, a member of the European Monetary Union, works with a solid (if imperfect) currency. Brazil, on its own, doesn’t.