Derivs - FX

The euro was center of trading this morning after Mario Draghi, president of the European Central Bank, didn’t give the fx market any news of new measures to deal with the eurozone crisis.

The Absolute Insight Currency Fund, a sub-fund of asset manager Absolute Insight, has been buying short-dated puts on the euro as implied volatility has been historically low.

Deutsche Bank is advising investors to buy one-week at-the-money forward straddles on the U.S. dollar against the yen and hedge them hourly, while simultaneously selling one-week ATM forward straddles on the same pair, but hedge them daily.

Insight Investment has hired Paul Lambert as head of currency in London.

Average daily volume total for over-the-counter fx instruments in the U.S. has decreased by 12% since October 2011.

Société Générale is advising investors to buy three-month seagulls on the Norwegian krone against the Swedish krona.

Investors in Asia are looking at U.S. dollar, yen risk reversals as a downside hedge against a further decline in the E.U. economy.

International regulators have issued interim regulations that will force banks to hold capital against exposures to central counterparties on derivatives trades.

End users holding U.S. dollar/China yuan bonus non-deliverable forwards could look to exit the trades if the People’s Bank of China continues to fix the nation’s currency weaker, according to traders and structurers.

The Australian Treasury is looking to change the country’s main financial law to enhance its oversight of over-the-counter derivatives.

Nomura’s Asia Pacific House of the Year win shows that when doing business in the region, it pays to have a local pedigree, knowledge and a commitment to Asia.

The Bank of England is looking to reduce fx settlement risk given the importance the issue has taken on since the 2008 crisis.