Derivs - FX

Traders in non-deliverable forwards are moving away from expectations the yuan will appreciate as greater evidence suggests the People’s Bank of China will move to a growth-orientated fiscal policy.

Investors picking long term recovery of the U.S. dollar are buying downside euro puts, despite the currency’s leap Thursday in response to worse than expected U.S. economic figures.

Long-dated euro calls were being sold off yesterday, softening implied volatility on the EUR/USD.

Fx strategists at Lehman Brothers are advising investors to sell three-month USD/CNY non-deliverable forwards and buy 12-month USD/CNY NDFs.

ANZ Bank has nabbed Percy Tham from ABN AMRO. Tham will head up ANZ’s non-deliverable forwards trading desk and will be based in Singapore.

Investors have been zeroing in on U.S. dollar calls against sterling in the latter part of this week, as the greenback has been buoyed by better than expected results from JPMorgan and the drop in oil prices.

Economists at the Royal Bank of Scotland are advising investors to sell USD/CNY 12-month non-deliverable forwards because they believe the market is under-estimating the levels of yuan appreciation.

Investors are entering double no-touch trades on the belief the euro and U.S. dollar will be range bound between USD1.53-1.60 over the next one to three months.

The use of fx swaps by the People’s Bank Of China for Chinese commercial banks is increasing.

The Bank of Korea is selling U.S. dollars and buying Korean won in the swap market and dealing in non-deliverable forwards in USD/KRW in an attempt to strengthen the won and control inflation.

Retail sales heads in Asia report that investors have been buying fx baskets that reference emerging markets and Asian currencies.

Kang Tu has joined Nomura Holdings to head its regional local market currency trading team in Hong Kong from Citigroup, where he worked in a similar role.