Players Turn To Dollar Calls As Yen Depreciates

The dollar rally against the yen last week pushed traders into buying dollar calls and drove down the price and volume of dollar puts.

  • 18 Feb 2005
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The dollar rally against the yen last week pushed traders into buying dollar calls and drove down the price and volume of dollar puts. Lawrence Rhee, head of foreign exchange options trading at Société Générale in New York, said the move in dollar/yen caused traders to be less concerned about a fall off in the value of the dollar and this resulted in them turning their attention away from the favored contracts during the dollar weakening of short-dated and one-year dollar puts/yen calls. He added there has also been increased volume in trades designed to take exposure to short-dated dollar calls.

The greenback appreciated Wednesday after U.S. Federal Reserve Chairman Alan Greenspan used his congressional testimony to suggest a raise in interest rates, currently at 2.5%. The Fed will meet again on March 22. Also Wednesday, Japan released data showing gross domestic product shrunk by 0.1% in the fourth quarter, signaling another recession.

Greenspan's speech and the Japanese data led to the dollar strengthening against the yen to around JPY105.5, up from the JPY102 range four weeks prior. One month dollar/yen implied volatility fell to 9.3% from 11.1% a month ago. According to Rhee, there is little reason to believe the greenback's slow but steady gain over the past month will let up. He explained the dollar's health is being bolstered by the Fed's expected interest rate hike coupled with the steady rates in Europe and Japan as well as the U.S.' ability to finance the deficit. "There's no good reason why the dollar won't continue to rally," he said, adding, "Another run-up to new highs for the year is in the not too distant future."

  • 18 Feb 2005

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 358,291.38 1348 9.06%
2 JPMorgan 320,704.66 1461 8.11%
3 Bank of America Merrill Lynch 318,128.31 1104 8.04%
4 Goldman Sachs 236,643.87 789 5.98%
5 Barclays 231,197.41 895 5.84%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 35,007.57 165 6.53%
2 Deutsche Bank 34,880.53 120 6.51%
3 Bank of America Merrill Lynch 31,805.65 97 5.93%
4 BNP Paribas 27,920.60 169 5.21%
5 SG Corporate & Investment Banking 24,398.89 138 4.55%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 19,745.92 80 8.85%
2 Morgan Stanley 16,334.63 83 7.32%
3 Citi 15,972.34 95 7.16%
4 UBS 15,487.17 60 6.94%
5 Goldman Sachs 14,053.61 76 6.30%