Top Headlines

South Africa Sues Banks Over FX Collusion – Profit & Loss

South Africa’s Competition Commission says it is commencing prosecution proceedings against 14 banks over alleged collusion in ZAR markets.

Dollar Slips as Yellen Wraps Up Congressional Testimony – Wall Street Journal (subscription)

The dollar slipped despite better-than-expected US data and a brighter outlook for higher US interest rates. 

Why Currency Manipulation Rhetoric Will Grow Louder – Financial Times (subscription)

Dollar strength has left markets expecting Trump to ratchet up his accusations.

Sterling Inches Higher as Markets Take Brexit Breather – Reuters

Sterling gained around half a percent against the dollar, tracking broader moves in major currencies after some caution about the underlying strength of the US economy set in following a high January inflation number.

The Pound Could Be a Safe-Haven Again: Morgan Stanley – Pound Sterling Live

With key elections due in the Eurozone in 2017 investors will be asking where money might flow should an unsavoury election result be delivered.

China’s Holdings of Treasuries Dropped in 2016 by Most on Record – Bloomberg

China’s holdings of US Treasuries declined by the most on record last year, as the world’s second-largest economy dipped into its foreign-exchange reserves to buttress the yuan.

Asia Will Regret the Retreat of Global Yuan – The Star

China has set aside the project to internationalise its currency and Asia might come to regret it.

As Dollar Stumbles, Yen Offers Best Option for Bulls, AMP Says – Bloomberg

Nader Naeimi added to his bullish wagers on the dollar against the yen this month, predicting a 10 percent gain to 125 as the Bank of Japan maintains monetary stimulus.

Taiwan Central Bank Chief Faces Currency Test in Final Year – Bloomberg

Currency volatility and fears of rising global protectionism have cast uncertainty over the outlook for the export-dependent economy, posing a challenge for Perng, who has long emphasized stability as a priority.

Swaps Play Hidden Role in UK Banks’ Ring-Fencing Plans – Risk (subscription)

The complexity of UK banks’ swaps books is playing a behind-the-scenes role in the biggest shake-up of the industry in years – the requirement to house retail and investment banking businesses in separately capitalised legal entities from January 2019.

Korean Government to Protest FT’s Article on Currency Manipulation – The Korea Times

The Korean government is preparing a rebuttal to the article that market watchers say seems to have lost neutrality while siding with Japan where the daily’s owner is headquartered.

Bring Back “My Word Is My Bond” – Profit & Loss

The FX industry has become a little complacent about its self-regulatory role.

A New Age for FX Market Data – Profit & Loss (subscription)

The past year’s run of unprecedented market events has only served to highlight the growing demand for timely and reliable FX market data, yet innovation in this area has notably lagged behind the levels seen in other areas of the financial markets.

This Is What Happens to Inflation When a Currency Gets Unpegged from the Dollar – Seeking Alpha

On November 3, the Egyptian Central Bank removed all exchange-rate restrictions and raised its benchmark rate by three percentage points.

Regulatory News

SEC Weighs Curbing Investigators’ Powers to Probe Wall Street – Bloomberg

The Securities and Exchange Commission’s interim chief has quietly initiated a review that could make it harder for government lawyers to open investigations into corporate wrongdoing, said three people with knowledge of the matter.

Steven Mnuchin’s OneWest Lieutenant Is Considered for Comptroller Job – Wall Street Journal (subscription)

If selected for Comptroller of the Currency, Joseph Otting could mark shift from Thomas Curry, who adopted strict standards for large banks.

Fed’s Tarullo Says Progress on Too-Big-to-Fail Will Be ‘Durable’ – Bloomberg

Daniel Tarullo, the Federal Reserve’s point man on financial regulation, said the US effort to ensure Wall Street banks aren’t too big to fail isn’t finished yet, but that he believes the progress regulators have made will stick even after the Trump administration replaces him.

Trump is X Factor for Global Banking Reform – Politico

Top regulators are set to meet on March 19 with the possible aim — for the second time this year — of reaching a deal on controversial global bank capital rules.

Wall Street Rule Changes Will Be Slow in Senate, Crapo Says – Bloomberg

A key Republican Senator is casting doubt on hopes for quick action to dismantle the Dodd-Frank Act or overhaul the US mortgage-finance system, citing the need for bipartisan support in a Congress that seems to be far from providing it.

60 Percent of Fund Managers Have Not Implemented Solutions Ahead of MiFID II – Waters Technology (subscription)

Approximately 100 representatives of fund management firms participated in Northern Trust’s regulatory event, revealing concerns about the upcoming regulatory storm.

Company News

Citigroup’s Europe Chief: ‘London Will Remain Our Hub’ – Wall Street Journal (subscription)

London will remain Citigroup’s number one city for doing business in Europe after Brexit, according to its top banker in the region.

FXCM’s January Non-US Volume Rises 18 Pct – Reuters

Currency broker FXCM, which was banned last week from operating in the United States, said its non-US monthly trading volume rose 18 percent to an estimated $253 billion in January from December.

Saxo Payments Streamlines Processing With Banking Circle Virtual IBAN – Finance Magnates

Global foreign exchange and payments specialist Saxo Payments has unveiled Banking Circle Virtual IBAN, the group’s latest upgrade for FX and payments businesses to better streamline banking relationships and payments processing.

Market Savvy 

Brazil’s Real Strengthens as Central Bank Resumes Intervention – Reuters

The Brazilian real firmed to its strongest in more than a year and a half against the dollar, while the Mexican peso weakened after US consumer prices notched their largest gain in nearly four years.

C$ Pares Losses on Firm Data, Optimism on Trade Ties – Reuters

The Canadian dollar pared most of its losses against the greenback, supported by firm domestic data and optimism about the outlook for trade ties with the United States.

Emerging Stocks at 19-Month High, Currencies Ease – Reuters

Emerging equities rose to a 19-month high, tracking gains in developed markets, while the Russian rouble held at 1½ -year highs but other currencies eased after recent solid gains.