Currency Fx Trading

Gearing Up for the Buy Side's Global Trading Needs

Providers are beefing up their offerings to attract U.S.-based buy-side traders with a global appetite.
By Katherine Heires
Wall Street & Technology
June 16, 2006

As buy-side traders in the U.S. continue to set their sights on ever-more-complex global trading strategies, technology-driven firms that facilitate access to international markets have been keeping busy. Global market access providers such as Paris-based GL Trade and London-based Royalblue, for example, have been updating and refining their product offerings in the hopes of attracting new business from U.S.-based buy-side traders - in particular, those with an appetite for greater risk, new pools of liquidity and expanded trading opportunities in far-flung markets.

Other global access providers, such as Orc Software and New York-based Tradeware, that primarily provide their technology to sell-side firms also have been sprucing up their network offerings.

Light Economic Calendar Suggests Consolidation for EUR/USD Next Week

The currency market has been relatively quiet today with little meaningful price action except for the movements in the commodity currencies. The US dollar is mostly unchanged against the majors aside from a mild rally against the Japanese Yen. Both the first quarter current account balance and the University of Michigan consumer confidence surveys were stronger than expected. The current account deficit narrowed from US$223.1 billion to US$208.7 billion thanks to higher US overseas purchases and foreign investment in the US. Though encouraging, it is a bit distorting since net foreign purchases in the first quarter were decent. A first look at demand in the beginning of the second quarter is less encouraging. If you recall, yesterday we learned that foreigners only purchased $46.68 billion worth of US investments in April, the weakest accumulation since March 2005.

Peso up to highest level since May 18

The peso closed stronger Friday against the greenback, the highest since May 18 as the Asian currencies strengthen due to market anticipation on possible revaluation of Chinese yean and potential rate increase of Japan and European rates, traders said.

The traders also attributed the strengthening peso to the ebbing security concerns on North Korea missiles and weakening US dollar, the latter due to market expectations that foreign investors will return to the regions assets.

The peso closed P52.35 Friday, the highest since May 17, 2006, from the previous day's trading of P52.73. The currency opened at P52.63 and traded to a low of P52.34 and a high of P52.63.

The total volume turnover reached $589.200 million.

Marcelo Ayes, Equitable-PCI Bank trader, said the peso's strength mirrors the other Asian currencies due to expected rates increase of the central banks of Japan and Europe, which would narrow the differential against US dollar.

Forex - Dollar continues to suffer post-Fed fallout

The dollar continues to suffer from last week's relatively dovish policy statement from the US Federal Reserve and a recovery in risk assets, such as equities. Though the quarter point hike in the Fed funds rate to 5.25 pct was expected, the rate-setting Federal Open Market Committee cautioned about the outlook for growth. In response to the statement, the Fed funds futures now attach a 65 pct of another rate hike in August, down on 80 pct predicted before. 'Its accompanying statement, perceived as more dovish than expected, led to a decline in the dollar and a rally in equity markets,' said Ian Stannard, currency strategist at BNP Paribas. Though Stannard is 'dollar bearish', he said there is 'no reason yet to expect the dollar to fall out of bed', adding that this Friday's crucial US labour market report has the potential to help the US currency rebound.

Business news briefs: 6/14/06

Gov. Ed Rendell still expects a party interested in Latrobe Brewing's plant to step forward within days, but it won't be Sierra Nevada Brewing Co. Steve Harrison, vice president of the Chico, Calif., brewer, said his company was not interested in the plant. InBev, the plant's owner, is selling the Rolling Rock brands to Anheuser-Busch for $82 million. Anheuser-Busch will make the Western Pennsylvania brews at its Newark, N.J., brewery, putting about 200 employees at the Latrobe plant out of work at the end of July.

FTC 'stuffs' 2 Fla. companies
Two Florida-based companies and their operators accused of misleading consumers into believing they could earn from $550 to $3,000 per week stuffing envelopes at home have been barred from making future misrepresentations under a settlement with the Federal Trade Commission.

Aftermarket Movers: Starbucks Drips

NEW YORK (AP) - Starbucks Corp. saw its share price slip in extended trading Thursday on disappointing same-store sales. In the tech sector, revised guidance pushed down shares of semiconductor company PMC Sierra Inc. and software maker Business Objects SA.

The Seattle-based coffee chain reported higher revenue for the second quarter compared with the same period in 2005, but missed Wall Street estimates for same-store sales, or stores open for a year or more.