U.S. prosecutors in New York are probing FTX’s collapse, a source with knowledge of the investigations said on Monday, after the crypto exchange filed for bankruptcy protection last week following a rush of customer withdrawals. The downfall followed a failed rescue deal with rival exchange Binance, with FTX now facing scrutiny from U.S. regulators over its handling of customer funds, as well as its crypto-lending activities. The U.S. Attorney’s Office in Manhattan declined to comment. Reuters reported last week that at least $1 billion of customer funds have vanished from ...

USD: Not very often that DXY falls 4% in a week You only need one hand to count the number of times that DXY (a trade-weighted measure of the dollar) has fallen 4% in a single week. The severity of last week’s correction owes in large part to the fact that dollar ownership has been the most ‘crowded trade’ in the global investment community. Equally, that community was substantially underweight equities and last week’s combination of the softer core US CPI data and some supportive measures in China was the ...

The U.S. dollar steadied on Monday amid fading expectations of a less aggressive Federal Reserve interest rate hike after Governor Christopher Waller said the central bank was not softening its fight against inflation. A modest miss on U.S. inflation on Thursday put pressure on the dollar, which declined almost 4% in a week, marking its worst week in more than two and half years. But Waller said on Sunday that the inflation print last week was “just one data point” and that other similar readings would be needed to show ...

Crypto exchange FTX filed U.S. bankruptcy proceedings on Friday and Sam Bankman-Fried stepped down as CEO, after a rapid liquidity crisis at the cryptocurrency group that has prompted intervention from regulators around the world. The distressed crypto trading platform had been struggling to raise billions in funds to stave off collapse after traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal. The company said in a statement shared on Twitter on Friday that FTX, its affiliated crypto ...

USD: Weakness may not last long Yesterday’s US CPI read dealt a big blow to the dollar. Decelerating core inflation (0.3% month-on-month) surely represents an opportunity for the Federal Reserve to deliver a more convincing dovish pivot and soften its tone on the length/size of the tightening cycle. This is being reflected in the Fed Funds futures curve, which is now expecting only 50bp in December and a peak rate of 4.95% in 2023: a 30bp correction since last week. We can now expect a period of elevated market sensitivity ...

The dollar fell on Friday, extending losses from the previous day, when it posted its largest one-day drop in seven years after U.S. inflation came in lower than expected, making it less likely the Federal Reserve will keep aggressively raising rates. Data on Thursday showed consumer inflation rose 7.7% year-on-year in October, its slowest rate since January and below forecasts for 8%. The dollar staged its biggest drop since late 2015 as Treasury yields plunged, while other currencies – the yen and the pound in particular – jumped. Investor risk ...

There is currently no credible case for the United States to develop an official digital version of the dollar, Federal Reserve Governor Christopher Waller said on Thursday, keeping to his long-held skeptical view amid debate at the U.S. central bank. “The case for adopting one is not yet convincing to me and many others,” Waller said during an event at Queensland University of Technology in Brisbane, Australia. He has repeatedly referred to it as a solution in search of a problem. Fed policymakers remain divided on the need for a ...

Trading volumes in bitcoin futures and exchange traded funds (ETFs) has exploded as investors scrambled to hedge their positions after this week’s slump in digital tokens triggered by turmoil at crypto exchange FTX. CME bitcoin futures November contracts traded at $17,250, with a volume of 13,292 at 11:24 a.m. EST (1624 GMT), which was a 3% discount to the spot price of $17,770. Trading volumes soared on Tuesday and Wednesday as FTX’s woes worsened, touching 48,554 and 32,168 contracts respectively, significantly higher than volumes over the past two months which ...

Today’s focus will be the October US CPI release which will have implications for Fed policy, risk assets and the dollar. News from Canada that a mortgage investment fund is suspending redemptions could also be a first signal of the cross-over from higher interest rates to financial stability risk. We would continue to favour the dollar USD: What has core inflation got to say? At last month’s FOMC meeting, Federal Reserve Chair Jay Powell concluded the press conference with a sense of frustration that inflation had not fallen more quickly. ...

The dollar inched higher ahead of U.S. inflation data due later on Thursday, while cryptocurrencies remained under pressure after crypto exchange Binance scrapped plans to rescue its ailing rival FTX. The greenback surged on Wednesday against its peers but later pared some of those gains, with investors also digesting the U.S. midterm election results. The dollar index, which tracks the currency against major peers, was last up 0.11% to 110.48. All eyes were on U.S. inflation figures due later on Thursday, which could have a big impact on the scale ...

The dollar advanced against several major currencies on Wednesday, as results so far for the midterm elections showed little evidence of a “red wave” resounding Republican victory that some expected, leaving investors to focus on upcoming inflation data. Republicans made modest gains in U.S. midterm elections but Democrats performed better than expected, leaving control of the U.S. Congress and the future of President Joe Biden’s agenda unclear on Wednesday morning. A stronger showing by Republicans may have backed the idea of less fiscal support and potentially a lower peak in ...

USD: Mid-terms point to a challenging two years of US policy What we have seen so far from the US mid-term results are: i) the Republicans likely taking control of the House, ii) a much closer Senate race than expected with a possibility the Democrats could retain it, and iii) the swing to Republicans not being as large as expected. How the US mid-terms play out in FX markets is rather a loose proposition – suggestions had been that a likely equity rally on the back of Republican control of ...

The dollar steadied near its weakest in two months against the euro on Wednesday as traders waited on results from U.S. elections and on inflation data this week that will guide expectations for the interest rate outlook. Cryptocurrencies were also top of mind for investors, as they stabilised after tumbling on Tuesday, when nerves about the stability of exchange FTX turned to a rush of withdrawals and ultimately a bailout deal from bigger rival Binance. The euro was little changed at $1.0066, just off the $1.0096 hit overnight, its highest ...

A look at the day ahead in Asian markets from Jamie McGeever. There’s a meltdown in the Wild West of crypto, equity markets lose their recently-found Mojo, volatility spikes higher and investors flock to U.S. Treasuries for safety and security. Did financial markets return to some semblance of normality on Tuesday? That’s pretty much how world markets unfolded in the United States hours in response to the surprise news that crypto giant Binance signed a nonbinding agreement to buy rival FTX’s non-U.S. unit FTX.com to help cover a “liquidity crunch”. ...

USD: The known unknowns The dollar remains in corrective mode as investors, very underweight in both equity and bond markets, stand ready to adjust positions on the latest headlines out of China. Here, China’s zero-Covid policy represents a ‘known unknown’ for the market and one where any significant relaxation could unleash a wall of cash parked on the sidelines in dollars. Active investors would not want to be caught out by a year-end rally in risk assets. Some concrete news on China’s Covid policy would probably trigger more of a ...