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ICE Joins FXPA
The Foreign Exchange Professionals Association (FXPA) is pleased to announce the addition of the Intercontinental Exchange (ICE) onto the Founders’ Council. “We are pleased to join FXPA and look forward to working with its members to support policies for a transparent and efficient market that allows participants to effectively manage currency risks,” says Intercontinental Exchange’s chief strategy officer David Goone. The addition of ICE brings to 20 the number of institutional members now part of FXPA, which is due to hold elections this afternoon.

To find out how you can support the FX industry through education, research and advocacy, visit our website at www.fxpa.org, become an institutional member, sign up for our newsletter, FXPA globalFXsource.

Banks to Charge for Forex Trading at Fix – Wall Street Journal (subscription)
Banks including Barclays, Deutsche Bank and Credit Suisse are planning to charge clients for carrying out foreign exchange trades at the so-called 4pm fix.

US Is Seeking Felony Pleas by Big Banks in Foreign Currency Inquiry – New York Times
The Justice Department is pushing some of the biggest banks on Wall Street – including, for the first time in decades, American institutions – to plead guilty to criminal charges that they manipulated the prices of foreign currencies.

LCH ‘Disappointed’ By Esma’s FX Clearing Decision – Financial News (subscription)
The chief executive of LCH.Clearnet’s specialist foreign exchange clearing house has criticised the decision by European regulators to abandon clearing for certain types of FX trades.

NY Monitor in Deutsche to Probe Possible FX Rigging: Sources – Reuters
Deutsche Bank’s electronic FX trading platform is now under the scrutiny of a monitor installed by New York’s banking regulator, as part of a probe into whether the German lender manipulated the currency market, people familiar with the matter told Reuters.

SEFs Face Reckoning With Unintended Consequences Warns Report – Banking Technology
Like opening Pandora’s box, the emergence of swap execution facilities in US derivatives markets has brought unexpected consequences and problems as well as benefits. In some cases, asset managers are actively looking to avoid trading on the new platforms and are even turning to other asset classes, according to a new report by OpenLink.

Swiss Franc Losses Blamed on Liquidity Gap – Risk Magazine (subscription)
Bank losses from January’s shock Swiss franc move were probably the result of banks being unable to delta-hedge US dollar/Swiss franc options books, according to traders and risk managers at four dealers. In a matter of 20 minutes, the rate fell 38%, but there was no liquidity for most of that time.

Greece: Greenspan Predicts Exit from Euro Inevitable – BBC News
The former head of the US central bank, Alan Greenspan, has predicted that Greece will have to leave the eurozone. He told the BBC he could not see who would be willing to put up more loans to bolster Greece’s struggling economy.

Euro Still a Fragile Prospect – Wall Street Journal (subscription)
The euro’s breakneck descent against the dollar has come to a halt of late. That might be surprising given the rising tensions over Greece, which are raising fundamental questions about the single currency’s longer-term prospects. The best bet is still on further euro decline.

US Dollar Drifts Higher as Greek Worries Weigh on Europe – Globe and Mail
Nerves over Greece’s future in the euro and the conflict in Ukraine dragged on European markets on Tuesday, while bets on the likelihood of a US interest rate hike nudged the dollar higher and oil prices held steady after a rebound.

This Single Currency Move Pressures the Entire Eurozone – Market Watch
The decision of the Swiss National Bank to abandon a fixed value of the Swiss franc against the euro and its after-effects foreshadows the end of central bank activism.

Yuan Advances as PBOC’s Higher Fixing Curbs Weakening Bets – Bloomberg
China’s yuan gained as the central bank raised its reference rate and comments from a currency regulator damped speculation it will weaken. The People’s Bank of China increased the fixing by 0.03 percent to 6.1295 a dollar.

Egypt’s Currency War: The Devaluation Eclipsed by Russia, Brazil – Bloomberg
As investors focus on weakening exchange rates from Russia’s ruble to the Brazilian real, Egypt has fired its own shot in the global currency war. Egypt cheapened the pound more than any other Middle East currency this year by abandoning its fixed peg against the dollar.

 

 

Regulatory News

Europe’s Open Access Rules Pose Threat to End-Users, Says ICE Chief – The Trade
Europe’s incoming rules granting open access to clearing houses threaten increased capital requirements for end-users of derivatives, according to Jeffery Sprecher, chairman and CEO of Intercontinental Exchange.

Regulators Curb High-Frequency Trading – FOW Magazine (subscription)
A court case has underlined the seriousness with which disruptive trading strategies are taken by authorities.

US Lawmakers Seek to Tackle Currency Cheating with Trade Bill – Reuters
A bipartisan group of US lawmakers will unveil legislation on Tuesday aimed at stopping trading partners from manipulating their exchange rates to gain a competitive edge amid a wider debate over using trade deals to punish currency cheats.

Bank of England’s Carney Urges ‘Big Push’ on Bank Rules, Worries Over Reform Fatigue – Reuters
Bank of England Governor Mark Carney has urged the G20 to mount a “big push” to implement global regulatory reforms, fearing that governments may be tiring of non-stop rule making since the financial crisis six years ago.

 

 

Company News

Icap FX Spike Fails to Boost Earnings – FOW Magazine (subscription)
Icap said recent growth in volatility in the currency markets was partly offset by low interest rates and bank leveraging as the world’s largest interdealer broker reported flat revenue for the latter part of last year.

European Regulatory Uncertainty Proves Nice for ICE – Finanacial News (subscription)
Intercontinental Exchange has extended the opening hours of its US clearing house to cater for a surge in European demand, as regulatory delays force swap positions held by firms in the EU to migrate to the US for clearing.

Late Surge in Trade Volumes Leads To Profitable Quarter For CME – Forbes
CME witnessed a decline in combined trading volumes across all derivative classes, both sequentially (-4.5%) and annually (-13.2%), in the second quarter. However trading activity picked up in Q3, as trade volumes rose by over 12% y-o-y as traders began to speculate when the Fed will start raising interest rates.

FXCM to Discontinue 13 Currency Pairs as Risk Mitigation Continues – LeapRate
On Friday, 20 February, FXCM will discontinue trading on 13 currency pairs. Should a client currently have a pending order to open a position in the pairs concerned, the order will be deleted prior to market close on 6 February.

 

 

Market Savvy  

USD Bulls’ Nerves are Fraying – Where’s the Follow Through?
Saxo Bank
The USD rally on Friday looked very promising, particularly given the strong fundamental support for the rally in the form of Fed Funds futures suggesting much higher anticipation of US Federal Reserve rate hikes moving forward. But the complete lack of follow through yesterday gives significant reason for pause – this USD needs to get back on the rally track immediately and make a show of strength today or else we may be faced with a significant further USD consolidation.

 

 

Press Releases

FXCM Upgrades Trading Station Platform
FXCM has launched a suite of real volume indicators exclusively for its flagship Trading Station platform. The volume indicators provide traders market data directly on the charts, the ability to analyse market behaviour, and trading psychology by displaying what the crowd is doing.

DTCC’s Legal Entity Idenitifier Service, the GMEI Utility, Gathers Significant Momentum in 2014
The Depository Trust & Clearing Corporation’s Global Markets Entity Identifier (GMEI) utility, offered in collaboration with Swift, has issued over 165,000 legal entity identifiers (LEIs) to entities from over 140 jurisdictions, representing approximately 50% share of the LEIs issued worldwide.

 

 

Industry Events