The US Commodity Futures Trading Commission’s latest Commitments of Traders report has shown an aggressive pruning of short US dollar positions, based on International Money Market data.

The US Commodity Futures Trading Commission’s latest Commitments of Traders report has shown an aggressive pruning of short US dollar positions, based on International Money Market data.

It was a week of heavy selling in the euro as a confluence of factors turned against it. Traders across the street say they saw heavy liquidation of long euro positions over the week, and it wasn’t just about the “de-risking trade,” that has seen the US dollar close the week higher.

Negative sentiment has quickly turned from the dollar to the euro, as concerns about potential defaults by the weakest members of the eurozone raises doubts about the stability of the single currency. Option markets are providing a cheap way to hedge and take advantage of the euro’s first-quarter rally.

Purisima says more local funding to come; Republic targets investment grade rating

Hotspot FX, the multi-dealer platform (MDP) owned by US broker Knight Group, executed more than $1tr of FX volume for a fourth-straight month in April.

Investing in currencies is the most efficient way to get exposure to emerging markets growth and offers consistently superior returns compared with buying emerging market equities, says Anthony Morris.

With electronic trading more important than ever, Zar Amrolia, Deutsche Bank’s global head of foreign exchange, says that investment in people and technology will keep the bank in the driving seat with Autobahn. He discusses the relative merits of single-dealer and multi-dealer platforms as Euromoney’s 2011 FX survey goes live.

With electronic trading more important than ever, Zar Amrolia, Deutsche Bank’s global head of foreign exchange, says that investment in people and technology will keep the bank in the driving seat with Autobahn. He discusses the relative merits of single-dealer and multi-dealer platforms as Euromoney’s 2011 FX survey goes live.

It was all smiles in the foreign exchange markets last week after the US Treasury proposed exempting FX forwards and swaps from clearing and trading rules contained within the Dodd-Frank Act. But the smiles have turned to frowns this week after the industry’s success in arguing that default risk in FX markets was “relatively small” was shot down by Stanford University’s Darrell Duffie.

The key theme for FX pricing last year was normalisation, say fund managers. Gone are the days of sky-high spreads and vanishing market makers; stability is the new status quo. But has liquidity provision from the banks actually got better? The answer seems to depend very much on when and where you're trading.

The key theme for FX pricing last year was normalisation, say fund managers. Gone are the days of sky-high spreads and vanishing market makers; stability is the new status quo. But has liquidity provision from the banks actually got better? The answer seems to depend very much on when and where you're trading.

The dollar’s status as the world’s pre-eminent reserve currency is under threat as the country faces a growing budgetary crisis, says Jerome Booth, head of research at emerging markets asset manager, Ashmore Investments.

The dollar’s status as the world’s pre-eminent reserve currency is under threat as the country faces a growing budgetary crisis, says Jerome Booth, head of research at emerging markets asset manager, Ashmore Investments.

Over the past few weeks EuromoneyFXNews has spoken numerous buy side participants about how they choose to execute foreign exchange. A fifth of all forex trades are now executed on multi-dealer platforms (MDPs), compared with fewer than 10% in pre-crisis days. What’s driving the trend?

The rise in the number of high frequency trading firms in FX markets has had an overwhelmingly positive effect on market liquidity, rather than a detrimental one, a veteran hedge fund manager told Euromoney's Forex Forum last week. Some are even offering prices to hedge funds and other asset managers directly, bypassing the need for them to do business on banks’ internal platforms, in some cases.

Photos from the event

European banks benefit from euro introduction; spurs consolidation of market share.

Seen as hedge to currency debasement; Integrated FX and metals pricing adds advantage

See the full results here:

Bank of America Merrill Lynch is big, but it has a small FX footprint. With some key hires in recent years, it hopes to capitalize on its potential. Can it deliver? asks Hamish Risk

Euromoney gives you everything you need to know about the global foreign exchange market.

See the full results here:

Try out our foreign exchange news service at EuromoneyFXNews.com

In December 2005, Euromoney published an article entitled “Do big FX banks need a new platform?” It told the story of how, behind closed doors, banks were planning to set up a new bank-only trading system, in an attempt to re-establish the old model of interbank dealing.

See the full results here:

Seen as hedge to currency debasement; Integrated FX and metals pricing adds advantage

Royal Bank of Scotland economists believe countries in Asian will strengthen their currency in order to rein in domestic inflationary pressures. And with most regional economies doing well, the bank believes this should not harm export competitiveness. Currencies are in emerging Asia are unlikely to weaken in the foreseeable future despite domestic inflationary pressure which is typically bad for them, economists at Royal Bank of Scotland have argued.