Derivs - FX

The Bank of Thailand has freed up local commercial banks and foreign banks with an on-shore presence to use derivatives more often across the asset spectrum via new regulations which kicked in earlier this month.

Investors, mostly largely hedge funds, are diving in to at the money straddles on the U.S. dollar/yen cross, selling up one month maturities and buying six month maturities as the pair continues to be range bound.

China’s State Council has published revised foreign exchange regulation to allow foreign enterprises and individuals to make onshore derivatives investments in the fx and rates markets for the first time.

Euro/Swiss franc plays are seeing interest from hedge funds and bank prop desks, who are taking the view negative fundamentals on the euro may cause euro spot prices to break out of their historically tight range and trend lower.

Fx analysts at Royal Bank of Scotland are recommending investors buy U.S. dollar calls against the Singapore dollar, Myanmar ringgit and Chinese yuan over expectations falling oil prices will weaken the currencies against the U.S. unit.

Lehman Brothers’ fx strategists believe non-deliverable forward rates are pricing in too much appreciation of the Taiwanese dollar versus the U.S. dollar.

Risk reversals on EUR/USD continue to be in favor of downside euro puts this week, as bearish sentiment about the European economic outlook takes hold.

Mitul Kotecha, head of global foreign exchange research at Calyon, has relocated to Hong Kong from London where he will remain in the role which encompasses development of derivatives trade ideas and strategies for global currencies, but he will have a greater focus on Asia markets.

Barclays Capital has hired Andrew Weiss as a director in sales for its New York over-the-counter derivatives solutions team.

Citigroup has appointed Stuart Sopp as head of G10 spot fx trading for Asia.

Risk reversals on EUR/USD switched in the wake of the European Central Bank’s warnings about weakness in the eurozone economy Thursday, with investors now trading three month puts against the U.S. dollar at a 0.3% premium versus calls.

Options on European emerging market currencies are finding takers as liquidity improves and players position for movement in the underlying