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FOREIGN EXCHANGE

Dazed and confused

The FX market must always have a bogeyman. Once upon a time it was ‘the Russian’, later it was Negara. This week, I got a call from a mate who is a fixed-income futures broker, saying that bonds had caught a bid because a UK hedge fund was puking out of its long sterling/yen positions and was about to go bust.

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Second life or get a life?

“Another day, another dollar,” is what they used to say, supposedly implying that every day is different in the wonderful world of FX. My experience was that many days were identical. Events this week have left me a little dazed and confused, but one thing I noticed sitting on my perch as an outsider is that sometimes things are still remarkably similar.

The FX market must always have a bogeyman – someone who can be blamed for every sudden move up or down. Once upon a time it was ‘the Russian’, later it was Negara. There have been many others. This week, I got a call from a mate who is a fixed-income futures broker, saying that bonds had caught a bid because a UK hedge fund was puking out of its long sterling/yen positions and was about to go bust. 

I rang a couple of contacts.

The first said that one of his credit guys had just asked him if he knew anything about a hedge fund going bust; the next told me the seller and then buyer was a group of Russian banks who seemed to be acting in collusion and bashing various counterparties around.

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