Top Headlines

Sterling Edges Higher Ahead of Bank of England Decision – Reuters

Sterling edged higher as traders awaited a Bank of England meeting that will be watched for signs of whether recent progress in Brexit talks and higher UK inflation could speed up the pace of future interest rate hikes.

Dollar Nurses Losses After Fed Keeps Outlook Unchanged; ECB Eyed – Reuters

The dollar held at more than one-week lows after the US central bank kept its economic forecasts unchanged with investors expecting more losses if the European Central Bank outlines a more optimistic outlook on the economy.

No Surprises: Fed Raises Interest Rates Again – Profit & Loss

The US Federal Reserve raised interest rates for the third time this year, citing an improving economy and labour market.

Euro-Pound Parity Looks Remote, But So Does a Big Rally – Financial Times (subscription)

Market should not discount the return of political risk in Europe.

Deutsche Research Highlights FX Macro Struggles – Profit & Loss

New research from Deutsche Bank shows that returns from FX macro managers have dropped to their lowest levels since the 1980s, despite the fact that “there does not appear to be a structural decline in the excess returns available to FX investors”.

Currency Traders Are Having Their Worst Year Since 2006 – Wall Street Journal (subscription)

Currency traders have gotten left behind in the 2017 market rally. A BarclayHedge index that tracks returns for 58 currency-trading programs is up just 0.6% for the year, on track for its worst annual performance since 2006.

Banks Lobby for Reprieve on Key Part of Mifid II Rules – Financial Times (subscription)

Banks are pushing for an eleventh-hour reprieve for a key part of new European markets rules because about a fifth of their clients do not have the vital tag they will need to continue trading.

EU Draws Brexit Battle Lines for Banks – Bloomberg

The UK’s breakthrough deal to get Brexit talks moving on to the future trading relationship may be short-lived.

Is Bitcoin a Bubble? 96% of Economists Say ‘Yes’ – Wall Street Journal (subscription)

The digital currency’s price has surged, but economists say speculation is driving the gains. 

Irrational Analysis of the Year – Profit & Loss (subscription)

In a controversial move I have decided not to name a winner, rather I want to give the Irrational to a new style of analysis – the Supercomputer Predictor.

Regulatory News

Bitcoin Trading Thrives Wherever Regulators Crack Down Most – Bloomberg

Bitcoin trading expanded faster this year in emerging markets than developed ones – and quickest of all in places where authorities tried to crack down.

Germany Monitoring Bitcoin Market Impact: FinMin – Reuters

Germany is carefully monitoring the impact of cryptocurrencies on markets, a finance ministry spokesman said, as bitcoin surged and the futures of the best known cryptocurrency made their world debut on a US stock exchange.

Initial Coin Offerings Surpass $4 Billion Despite SEC Warnings – Bloomberg

Proceeds from initial coin offerings have topped $4 billion this year despite escalating warnings from U.S. officials of rising risks and fraud.

Yellen: No Big Differences Between Her, Powell on Bank Rules – Wall Street Journal (subscription)

Federal Reserve Chairwoman Janet Yellen doesn’t expect the Fed will dramatically depart from its current course on bank rules after she leaves early next year. 

FCA Delays Fresh Conduct Rules for Asset Managers – Financial Times (subscription)

Watchdog pushes back plans to extend regime to all of financial services industry.

Chinese Authorities About to Chop the Payment Supply to 40 Well Known International FX Firms – Finance Feeds

Forty well known FX brokerages have been listed by Chinese authorities as operating illegally in China, some of which have massive customer bases across the country and are living from customer losses.

Company News

UK Businesses Increase FX Hedging Ahead of Brexit – Profit & Loss

As UK businesses prepare for Brexit, small firms are managing their FX risk more and more as they look to increase trade internationally, and exporters forecast increased growth in FX turnover, according to a new report from East and Partners released this week.

Deutsche Boerse Weighs Offering Bitcoin Future – Reuters

German stock exchange operator Deutsche Boerse is considering the launch of a bitcoin future on its Eurex derivative exchange, a spokesman said.

MarketFactory Enables Bitcoin Trading Via its API – Profit & Loss

MarketFactory has announced today that FX market participants will be able to use its API, Whisperer, to trade bitcoin futures on the CME when they launch on December 18.

Greek Court Backs Extraditing Russian Bitcoin Suspect to US – Wall Street Journal (subscription)

Greece’s Supreme Court ruled in favor of extraditing a Russian cybercrime suspect to the US to stand trial for allegedly laundering billions of dollars using the virtual currency bitcoin.

Market Savvy

Asian Currencies Firm as Dollar Weakens After Fed Meeting – Reuters

Asian currencies rose against the dollar as a guarded outlook from the US Federal Reserve on the economy weighed on the greenback following its widely anticipated interest rate rise.

Traders Are Bracing for ‘Explosive’ Moves in the Rand – Bloomberg

Just days before South Africa’s ruling African National Congress elects a leader to replace President Jacob Zuma as party head, the rand’s implied volatility versus the dollar has shot up to levels last seen in 2008.