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Fidelity Unveils Digital Assets Business Fidelity Investments, one of the world’s largest financial services providers with more than $7.2 trillion in client assets, has announced the launch of a new company, Fidelity Digital Asset Services, which will offer enterprise-quality custody and trade execution services for cryptocurrencies to sophisticated institutional investors such as hedge funds, family offices and market intermediaries. The launch culminates a more than four year programme by Fidelity that started with initial research conducted in February 2014. The firm says it believes that distributed ledger technologies can enable entirely new business models, lead to the creation of frictionless capital markets and improve existing financial market infrastructure.
Oanda Offers FX Forward Rates to Corporates Oanda will now offer forward rates to corporate clients around via its Exchange Rates API. This new data set aims to provide corporate treasurers and finance directors with an accurate, trustworthy view of the forwards market, offering over 360 forward rate currency pairs – which Oanda claims is more than any other currency data feed on the market. Data is delivered via Oanda’s API and can be integrated into any treasury management system, enterprise resource planning system or billing software solution. “Having been a trusted source of FX data for more than 20 years, Oanda is uniquely positioned to create a market consensus despite the decentralised treasury market, enabling us to deliver reliable forward rates to our clients.
Survey Highlights Impact of Avoidable FX Risk in Corporate Earnings In total, 70% of corporate chief financial officers (CFOs) said that their company suffered reduced earnings in the last two years due to avoidable, unhedged FX risk, according to a global survey of 200 CFOs and nearly 300 treasurers. In the survey, conducted by HSBC and FT Remark, 58% of CFOs in larger businesses said that FX risk management is one of the two risks that currently occupy the largest proportion of their time, while 51% said that FX is the risk that their organisation is least well-placed to deal with. Meanwhile, 72% of treasurers said that FX risk management is one of the most important aspects of their job and 53% said that they expect changes in FX regimes and regulation to materially impact their risk management strategy in the next three years.
FMSB Seeks Feedback on Information Sharing Guidance The FICC Markets Standards Board (FMSB) has published a Transparency Draft of a new Statement of Good Practice on Information and Confidentiality for fixed income and commodities markets. The FMSB says the proposed guidance is not intended to apply to the FX markets, which is covered by the FX Global Code, or to the precious metals markets, which is covered by the Precious Metals Code, rather it seeks to build on those works for the fixed income and commodities markets.
CLS Welcomes First Mexican Settlement Member Banco Monex has joined as a CLS settlement member, becoming the 70th firm to assume the status. “I could not be more pleased to welcome Banco Monex as the first Mexican bank to participate directly in our settlement service,” says David Puth, CEO of CLS. “Participation in CLS Settlement continues to grow, and our settlement members, such as Banco Monex, play a critical role in ensuring market participants have access to the highest standard of risk mitigation to support their trading operations and enable us to deliver a safer and more stable FX market. We look forward to continued growth in the Mexican market.” Mauricio Naranjo, CEO of Grupo Financiero Monex adds, “Joining CLS as a member with direct participation in the CLS settlement service is an important milestone for Banco Monex. The Mexican peso is the most actively traded currency in the Latin American region and mitigating settlement risk is a key priority for many institutions. Participation within the CLS ecosystem will enable us to achieve this goal for our operations and through time for our clients as third parties, while significantly enhancing liquidity efficiencies for the Mexican market.”
Bloomberg Rates Added to NEX eFix Bloomberg FX fixing rates (BFIX) will be added to the NEX eFix Matching Service, which enables customers to execute fixing interest electronically via the EBS Market platform, the firms have announced. The eFix Matching service was launched in 2014 as a central market utility for reducing benchmark fixing risk, NEX says that it has seen a growth of 25 percent API to 65 percent API execution since 2014, driven by the continued trend towards automation and a shift in the way banks manage client fixing orders.
FX Volumes Slightly Lower: Surveys The latest round of FX committee semi-annual turnover surveys indicate that activity globally dipped slightly in October 2017 from the previous April, but was up year-on-year. The US was the bright point amongst the surveys, showing a 6.2% rise from April 2017’s level and 7.2% higher than the previous October, while the UK, still easily the world’s largest FX market, saw activity decline by 4.3% from April, however it was up 5.4% year-on-year. Elsewhere, all centres saw slightly higher activity from the April 2017 survey, however Singapore and Canada were up on a year-on-year basis while Japan and Australia declined slightly.
UK Businesses Increase FX Hedging Ahead of Brexit 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. Following interviews with 2,211 UK corporates, East and Partners has revealed that 25% of micro businesses and over 40% of SMEs used FX forwards in the second half of 2017, an increase of 16% and 15%, respectively, over the last six months. The report also shows that larger businesses are also using hedging options on a more regular basis, with nearly half indicating their use. “Awareness and understanding around the benefits of FX risk management solutions has clearly hit home with UK small business, leading to record highs in its usage,” says Simon Kleine, business lead at East and Partners Europe.
NEX Group Sees Increased Revenues NEX Group has unveiled increased revenues for the six months to September 2017, however operating profit has dipped. Nex Markets performed well, however, and contributed to the increased revenues. Nex says that revenue was £287 million, up from £254 million in the same period last year, a 13% increase that is trimmed to 7% on a constant currency basis. Meanwhile, trading operating profit fell from £75 million to £63 million and its trading operating profit margin fell from 30% to 22%.
BNP Signs Treasuries Deal with GTS BNP Paribas and non-bank market making firm GTS, have announced a strategic collaboration, which they say, marks “a new era for banks and electronic market makers”. Under terms of the strategic collaboration, BNP Paribas will seek to improve the client experience by providing improved pricing in the secondary market for US Treasuries by the addition of GTS liquidity into its pricing framework. A dedicated team from both firms will leverage a mutually developed technology platform that seeks to provide BNP Paribas with access to greater liquidity.