Foreign Exchange Still Has the Power to Shock – Financial Times(subscription)
It is official: foreign exchange still has the power to shock. When the Swiss National Bank ended its currency’s euro cap in January, the franc leapt almost 30% against the single currency in a day. Swiss stocks plunged and two foreign exchange brokers collapsed.
SNB Says Franc Cap Stopped Being Beneficial – Wall Street Journal(subscription)
Switzerland’s central bank was forced to scrap its cap on the value of the Swiss franc because mounting costs would have been “out of all proportion” to potential benefits of maintaining the policy, the bank said in its annual report published Thursday.
Currency War is Now a Dud as Windfall From Devaluations Vanishes –Bloomberg
Currency wars, it turns out, may not be worth fighting right now. While weaker exchange rates have at times throughout history helped stoke economic growth by making countries’ exports cheaper, the benefits are becoming hard to find.
CME Urges Tougher US Response to EU Clearing Dispute – Financial Times(subscription)
The head of the US’s largest derivatives exchanges has suggested European clearing houses be restricted from US markets, if a long-running regulatory spat between the world’s two main regions for derivatives trading is not resolved soon.
Dollar Slips Further After Weak US Durable Goods Data – Reuters
The US dollar fell against a basket of major currencies on Wednesday after weaker-than-expected US economic data combined with a robust survey of German business morale to drive more unwinding of bullish dollar bets.
China Says No Problem with Capital Flight, Currency Solid – Dow Jones Business News
A senior Chinese foreign exchange regulator on Thursday played down concerns over a weaker yuan and capital flight, saying the local currency remained strong and capital was flowing into China, not out.
Treasury Select Committee Lists Further Questions for Lord Grabiner – Profit & Loss (free story)
UK MPs sitting on the Treasury Select Committee have outlined outstanding issues concerning Lord Anthony Grabiner’s investigations for the Bank of England (BoE) into the foreign exchange market and the conduct of liquidity auctions.
RBA Losing Currency War Spurs April Rate-Cut Bets to Curb Aussie –Bloomberg
The Reserve Bank of Australia is losing the global currency war and investors are betting it will have to cut interest rates as soon as next month to rein in the Aussie.