Archives of “fx market” tag

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Dutch Bank Algo Blamed For GBP Flash Crash

  
Education, Forex
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Another rogue algo takes matters into its own binary hands. Time to institute circuit breakers for the tiny FX market, which alone celebrated Obama’s latest set of oratory delight by flash crashing all on its lonesome…

From Goldman’s Mitesh Parikh:

 
 

GBP – what just happened

To save being asked anymore times – the short answer is I honestly don’t know.. 1.5290 – 1.5168 between 7.56am and 7.57am.. unlikely it was for a fix (that would make sense if closer to 8am), and price action doesn’t suggest a mis-hit since it was ‘walked’ down over the course of the minute albeit exceptionally aggressively (not everyone executes as subtly as we do… no comments please!) We saw Dutch interbank names selling aggressively towards 1.5200 with some suggestion that their algo blew up from a few market sources, although we can’t comment on the validity of this.  Needless to say the market has corrected, cable is back above 1.5300, cross now sub 0.8430 , exactly where we started.

German Economics Minister Confirms Fed Manipulates The FX Market

  
Analysis, Economy, Education
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The German Economics Minister Rainer Bruederle has just confirmed precisely what many have known and said for years, namely that the US Federal Reserve is active in the secondary markets, in this particular case in FX. While not so much of a secret for some of the fringe players such as a the SNB, BOE and BOJ, the Fed has never had a formal statement on currency intervention, as, of course, it would have been seen as a sign of weakness (and allegedly could be considered an unconstitutional activity). And why would anybody dream of manipulating the world’s strongest currency. Of course, if Bernanke manipulates currencies, as has now been confirmed, it is more than clear that he directly buys and sells stocks in the secondary market, and/or Treasuries in the primary. We wonder what other juicy disclosure Bernanke’s trans-Atlantic CB colleagues will announce once they are cornered about their recent market manipulative conduct.

From Dow Jones:

The U.S. Federal Reserve is also active in currency markets, German Economics Minister Rainer Bruederle said Friday.

His comments come on the heels of remarks made by his Swiss counterpart who said that the Swiss National Bank purchased euros to buttress the single currency.

“It is a regular procedure of central banks,” to intervene in currency markets, Bruederle said. “It is not a secret,” that central banks have a foreign exchange rate target, he added.

Bruederle said “eruptive” movements have to be avoided. He previously said that China holds 25 percent of its foreign exchange reserves in euros.

 

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