The $9 Trillion Short That’s Seen Sending the Dollar Even Higher – Bloomberg
There’s pent-up demand for the US currency that will underpin years of appreciation because the world is “structurally short” the dollar, according to investor and former International Monetary Fund economist Stephen Jen.
Euro on Defensive on Yield Pressure, Greece Concerns – Reuters
The euro was on the defensive on Monday morning, pressured by the European Central Bank’s stimulus driving interest rates lower in the euro zone and on concerns over talks between debt-strapped Greece and its creditors over more funding for Athens.
Do End Users Really Want to Trade FX on an Exchange or a CLOB? – Profit & Loss (subscription)
Historically there has been the perception that certain US authorities (yes I am talking about CFTC under a certain G Gensler esq) were keen to push FX onto an exchange model. More recently, many people are observing statements from various regulators, especially Europe, and seeing these as evidence that the market ends up on a central limit order book (CLOB).
Unpicking Higher Currency Volatility: A Guest Chart – Financial Times(subscription)
Volatility is on the rise in the foreign exchange market. But has the increase in volatility been spread equally throughout the trading day, or has it been concentrated at specific points? Have patterns in intra-day volatility persisted over the years?
Banks Implement New Surveillance Tools Following Rising Legal Costs –Profit & Loss (free story)
Although they have been the most vocal about it, Profit & Loss has been told that JP Morgan isn’t the only bank looking to new market surveillance technologies to help avoid rising legal costs.
Offshore Yuan Drops Most in a Month as China Exports Decline – Bloomberg
The yuan traded in Hong Kong fell the most in a month after China’s exports unexpectedly contracted, fuelling concern policy makers will favour a weaker exchange rate.
Yuan to Account for 10% of World Reserves by 2025: Survey – Bloomberg
China’s currency will account for 10% of world reserves by 2025 with Asian monetary authorities showing the most support, according to a survey of central banks carried out in March.
China’s FX Market Develops Further With Trade System Launch – Profit & Loss(free story)
China plans to launch its first borrowing and lending business in a number of global currencies this week, according to the People’s Bank of China.
Hong Kong Defends Currency Peg for Second Day as Stocks Jump –Bloomberg
Hong Kong’s de facto central bank stepped in for a second day to prevent the currency from rising against the US dollar as demand surged for the city’s stocks.
Aussie Drops Toward Six-Year Low as China Trade Slumps – Bloomberg
Australia’s dollar fell, headed for its steepest drop versus the US currency in three weeks, after China, its largest trading partner, reported a bigger-than-forecast decline in imports.
The Curious Case of the Cash-Rate Currency Trades – Australian Financial Review (subscription)
Significant recent changes in the structure of currency markets can explain part of the story of the mysterious movements in the Australian dollar before interest rate decisions.
Futures Brokers Feel Strain From Low Interest Rates and Red Tape – Financial Times (subscription)
The ranks of futures brokers are shrinking at a quickening pace as low interest rates and new financial regulations put severe strain on the middlemen of the $27 trillion listed derivatives markets.
Gain CEO Says Swiss Franc Fallout Will Cause Brokers More Pain – Reuters
Retail currency brokers survived the Swiss franc’s surge in January, but they will take more hits as some choose not to pursue into bankruptcy clients who lost money, according to the head of the one of the market’s biggest players.