The first day of 2017 is when an annual $50,000 quota to convert the yuan into foreign exchange resets, stoking concern there will be a rush to sell the local currency.
China’s foreign exchange regulator said it busted illegal transactions totalling $2.7 billion in Shanghai in cooperation with the police in 2016 and suspended three unnamed banks involved from selling foreign currency.
The dollar inched up against the yen after upbeat US economic data reinforced expectations for economic growth under Donald Trump’s Administration and more rate hikes by US Federal Reserve next year.
- Dollar Rises as US Trading Resumes, Treasury Yields Support – Bloomberg
- Dollar Rises in Light Trading – Wall Street Journal (subscription)
The London Stock Exchange Group is expected to announce the sale of its French clearing arm to rival Euronext within days in a cash deal worth about €510m.
The South Korean won and Taiwan dollar set fresh multi-month lows, after strong US economic data reinforced expectations that the Federal Reserve would be more hawkish in 2017.
The liquidity on the onshore foreign exchange market recorded a higher daily average volume of US$9 billion (US$1 = RM4.48) across all FX transactions this month, comparable to the average of US$8 billion from January to November, said Bank Negara Malaysia’s Financial Markets Committee.
A possible three rate hikes next year may cause a further sell-off in emerging market currencies.
2017 may well be the year in which North American institutional dark pools flourish, and in which MiFID’s restrictions on European soil and failure by European banks to operate according to US rulings may decimate European dark liquidity.
The Majlis Economic Commission is to hold a meeting with Economy Minister Ali Tayyebnia and Central Bank of Iran Governor Valiollah Seif to discuss the recent upheavals in the Iranian forex market, which have seen the US dollar gain considerably against the rial, announced the head of the commission.
It is time for customers to look at firms on a meritocratic basis and not just who is regulating them.
Shawn Egger, co-head of FX market making sales at Citadel Securities in New York, has left the firm, sources say.
Pitango is a specialist in financing very successful FX industry ventures.
The Australian and New Zealand dollars both recovered against their US counterpart, helped by a broadly robust tone to stock and commodity markets heading into the final trading days of 2016.
The Indian rupee weakened for the second consecutive session and hit over a three-week low against the US dollar on consistent selling by foreign institutional investors in the local equity and debt markets.
Central European currencies eased against the euro, tracking a strengthening of the dollar, while investors watched Romania where President Klaus Iohannis rejected the Social Democrats’ prime minister nominee after the December 11 election.