Top Headlines

US Derivatives Regulator to Review Bitcoin Futures Risks – Reuters

The US derivatives regulator will hold two meetings to discuss the procedure and operational controls for listing and trading digital currency futures it said, amid rising concerns over the risks bitcoin poses to the financial system.

Dollar Drops on Expected Shift in Monetary Policy Outside US – Wall Street Journal (subscription)

The dollar fell as investors bet on faster monetary policy tightening outside the US.

US Dollar Troubles Not Over Yet, But 2018 to Be a Better Year – Reuters

A rough patch for the US dollar, which just recorded its worst annual performance in 14 years, is forecast to ease in 2018 but is not over yet, according to a majority of foreign exchange analysts in a Reuters poll.

Euro Cements Gains as Policy Surprise Hopes Grow – Reuters

The euro consolidated gains below a four-month high on some expectations that European policymakers may have to start withdrawing stimulus policies earlier than previously forecasted against the backdrop of a strengthening economy.

Euro Heading to $1.30, Says Deutsche Bank – Financial Times (subscription)

Deutsche Bank is expecting a decent year for the euro, telling clients that it expects the currency to hit $1.30 by the end of this year.

Sterling Steadies as Traders Look to Brexit Talks for Fresh Cues – Reuters

Sterling steadied against the dollar and euro, ending the week at much the same levels it started it at, with traders keen to see new developments on Brexit negotiations before taking on new positions on the British currency.

Is MiFID to Blame for Thin Trading, or Is Everyone on Holiday? – Bloomberg

Traders have been hit hard by the January blues this year. Already dealing with seasonally low trading volume, the biggest shakeup to European regulation in a decade is making things even worse.

XTX: Last Look Defense Is “Nonsense” – Profit & Loss (video)

Jeremy Smart, head of distribution at XTX Markets, is critical of arguments that pre-hedging in the last look window enables FX market markets to keep quoting prices, even in difficult market conditions.

Regulatory News

SEC Warns Bitcoin, Cryptocurrency Investors at Risk – Reuters

The US Securities and Exchange Commission warned that investors should “exercise caution” with cryptocurrencies like bitcoin, noting state and federal regulators may not be able to recoup any lost investments from illegal actors.

Dodd-Frank Is Here to Stay – American Banker

Despite repeated campaign promises from President Trump to dismantle the Dodd-Frank Act, the crisis-era law remains firmly implanted in the bank regulatory system—and it seems almost certain to stay that way.

Securities Regulation to Watch in 2018 – Law360 (subscription)

As the Trump administration approaches its one-year anniversary, the president’s Wall Street regulators are finally getting their ambitious rulemaking – and rule-easing – agendas underway.

US Dollar Holds Key for Global Central Banks in 2018 – Financial Times (subscription)

Jobs data loom as first big test for reserve currency and policymakers.

Company News

GFXC to Push for More LP Disclosures – FX Week (subscription)

Following the publication of the final version of Principle 17, the committee will establish three new working groups.

LSE Trumpets Open Access as Eurex, ICE Step Away – Global Capital (subscription)

The LSE this week reaffirmed its commitment to open access under the second MiFID, as major European exchanges and clearing houses were granted exemptions from the requirement until July 3, 2020.

ICE’s December Volumes Mixed as Equities, FX See Rebound – Finance Magnates

ICE’s foreign exchange and credit volumes rebounded off a dormant two-month stretch, reaching its highest reading since September 2017.

Market Savvy

Emerging Market Currencies Head for Six-Year Highs – Financial Times (subscription)

Emerging market currencies have recovered to their pre-taper tantrum peak and were making further gains, lifting a key index close to its highest level in more than six years.

Asia Currencies to Pare 2017 Gains but Growth to Cushion Them – Reuters

Asian currencies are set to pare gains this year that they made in 2017 as the Federal Reserve raises interest rates further and Asian central banks proceed cautiously, cushioned by solid growth expectations, a Reuters poll showed.

Mexico’s Peso Is Expected to Make a Big Comeback – Bloomberg

For all the concern that the US might dump Nafta or that Mexico’s next president could upend economic policy, the peso is forecast to be the world’s best-performing major currency in the first half of 2018.