BNP Paribas, the 11th-largest FX bank according to Euromoney data, has hired a new global head of institutional sales, say two people familiar with the appointment.

Increased concerns about the UK economy have taken a toll on sterling in recent days, but central bank reserve managers are unlikely to ride to its rescue.

Traders say the short euro pain trade is dominating with the euro being squeezed on many EM crosses. The dollar’s recent ascent ran out of steam as risk appetite made a tentative return to global asset markets.

The options market has begun to see the emergence of large buyers in topside EURUSD calls, as ultra high risk reversals offer tempting value to hedge against the potential for a savage market squeeze in the euro.

Asset managers last week engaged in their heaviest selling in EURUSD since July 2009, according to UBS flow data.

Jefferies, the independent investment bank, is embarking on an expansion of its foreign exchange business with some key hires, sources tell EuromoneyFXNews.

The dollar and the yen found support as concerns over sovereign debt continued, while the euro received little respite from the election of a pro-reform government in Spain.

The latest Commitment of Traders positioning report issued by the CFTC showed the largest weekly change in euro positioning on the International Money Market in nearly two months, as investors from the leveraged funds category increased their net short exposure by more than 40%.

The Australian dollar dropped below parity against the dollar for the first time in one month as worries over the effects of the escalating crisis in the eurozone pushed investors away from risky assets, but the euro once again failed to break lower.

Teflon euro: single currency’s resilience a conundrum

Société Générale’s co-head of global FX trading based in New York, has left the firm, according to three people familiar with the situation.

National Australia Bank is closing its FX spot trading desk in New York, according to two people familiar with the situation.

Deutsche Bank has hired ex-Nomura chief currency strategist as its chief foreign-exchange strategist and head of fixed income research in Tokyo, the bank stated.

The euro came under selling pressure in London as eurozone debt worries persisted, but sellers of the single currency were frustrated as it failed to break significantly lower.

… Well perhaps not “massively”, but the Peterson Institute for International Economics, a Washington DC-based think tank focused on international economic policy, thinks the Swiss National Bank had a cheek intervening to weaken the Swiss franc.

One of the most common questions asked in the past week is why the euro has not fallen off a cliff, given that it faces the biggest challenge since its creation.

Increased FX volumes and volatility, due to the escalation of the eurozone debt crisis and fears over a global slowdown, led to much higher revenues at major FX banks in the third quarter, according to consultancy firm Coalition.

The combination of falling inflation and subsequent rise in real yields should support the pound, in particular against the euro, despite the increased likelihood of further quantitative easing in the UK.

Impeccable source tells Euromoney Skew about big UK bank testing and preparation for Greece leaving the Euro.

After a sell-off in Asia as fears over the future of the eurozone escalated, EUR staged a recovery after heavy bond buying from the European Central Bank, but sentiment towards the single currency remains fragile.

USD and JPY in demand with markets remaining nervous over the escalating eurozone debt crisis.

Leveraged funds trading on the International Money Market cut back USD long positions dramatically earlier this month, as positive developments in Greece calmed eurozone fears – just one day before the surge in Italian yields battered sentiment again.

Hotspot FX, the multi-dealer platform owned by Knight Capital Group, said month-on-month average daily volumes rose 0.2%, a relatively strong performance in a month when other trading venues reported a significant drop in trading volumes.

Weaker global growth and a moderation of inflation in emerging markets are likely to induce central banks in Asia and elsewhere to step up currency intervention in a bid to maintain local currency weakness next year, says UBS.

Foreign exchange contracts traded with CME Group, which operates the International Money Market – the largest contract market for exchange-traded FX – fell 15% in October.

The European Central Bank spent just EUR4.5 billion in the bond markets in the week to November 9 as it attempted to stop Italian borrowing costs from spiralling out of control, official data revealed on Monday.

HSBC announced job cuts at its FX division last week, which saw Dean Heiden, a director in FX institutional sales in London, and Ted Mermel, FX and derivatives sales in New York, both leave the bank, according to two people familiar with the situation.

The Italian Job: bond woes fuel eurozone breakup fears

CLS Group, the multi-currency cash settlement system, saw the average daily value of its settlement volumes fall in October, the first drop since February.

Irrespective of developments in the sovereign debt crisis, the European economic slowdown is now severe enough to spill over to the rest of the world, and the euro may in fact be a counterintuitive beneficiary according to Deutsche Bank currency strategist, George Saravelos.