Traders still have some positioning to do
Some London fix moves going through as it’s the first one of the year.
- USDCAD drops to test 1.2501
- GBPUSD zooms up to 1.3585
- EURUSD recovers to 1.2050 from 1.2025
Expect a couple opf days of this before things settle down.
I’ve lifted USDCAD at 1.2704 on this move.
Psychedelic chartist extraordinaire. Have your shades ready.
Philosophy: “Don’t be a Dick for a tick”
Read how Ryan got into trading here
Philosophy: “Don’t be a Dick for a tick”
Read how Ryan got into trading here
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Is there an explanation about what and how the London fix affects flows? Thanks
It’s basically a time when spot prices get set to value asset books and transact for customers. Say you have a portfolio of global assets that needs valuing, some firms will use the fix price for that.
Flow wise, let’s say a fund finds itself long some currencies and short others that it needs to re-balance each day. It will do those transactions at the fix and so will buy or sell as necessary. Due to the amount of deals that may be done in such a short period of time (usually starting 5 mins before and running for maybe 10 mins (and particularly around busy periods like month, quarter, year-end)), it can lead to some jump moves like we’ve seen today.
Here’s a bit more about it. https://www.reuters.com/article/banks-forex-settlement-fixings/forex-fixings-and-how-they-work-idUSL6N0T23K720141112
Thanks for the explanation. I appreciate it. That makes a lot more sense to me now.
No problem Joshua. Feel free to fling us any questions you like.
Thanks so much!