Barclays Allocates £500m for FOREX Penalties

BarclaysBarclays Bank has allotted £500m for current investigations into the alleged manipulation of foreign exchange involving several primary lending institutions.

This condition is bigger compared to the £290m penalty for manipulation of the Intercontinental Exchange London Interbank Offered Rate or LIBOR in 2012.

Meanwhile, the Financial Conduct Authority (FCA) is working on a settlement with six large banks in connection with their roles in the £3.5 trillion daily FOREX markets.

FCA will disclose results of its probe along with degree of penalties in November. Royal Bank of Scotland is also part of said probe and will possibly apportion funds for future penalties.

The publication of the regulatory action may include transcriptions of email messages and electronic chats associated with the scandal.

Barclays bared figures for the third quarter. It took an additional £170m hit for payment protection insurance (PPI).

The fine is the latest in a series of punishments imposed on the bank. Barclays acknowledged that fraud claims affected the performance of its investment bank and profits decreased significantly.

During the third quarter, profits dropped more sharply from £465m to £284m one year ago.

Almost 7,000 of job cuts affected the investment bank’s 24,000 employees.

Barclays released £160m of the total £1.5bn provision. The PPI indignity is the most expensive so far incurred by the banking sector.

Euro and US Dollar

The single currency was fairly lower versus the US dollar after positive third quarter growth figures in the United States raised market sentiments.

The Fed’s recent policy statement showed support for the country’s currency.

EUR/USD was 1.2548 during trading early in the day. This was the lowest since October 6. The currency pair later consolidated at 1.2617. It was down by 0.13 percent.

The pair will possibly obtain support at 1.2502 and resistance of 1.2772.

Market outlook was bolstered after the US Commerce Department publicized that gross domestic product increased at a yearly rate of 3.5 percent during the last three months and projection for three percent.

An independent report revealed that Americans filing for new claims with regards to jobless benefits were up for a second straight week although levels were pointing to resurgence in the labour market.

It stated that initial jobless claims soared to 3,000.

In the euro region, official figures showed that consumer price inflation in Germany progressed at a yearly rate of 0.8 percent this October which was unchanged from September. It compared to projections for a 0.9% reading.

The report came after data indicated that unemployment in Germany dropped by 22,000 in October compared to projections and gained 5,000.

Germany’s unemployment rate remained at 6.7 percent.

Spain’s economy increased 0.5 percent within the last three months and grew 1.6 percent on a yearly basis in accordance with forecasts.

The common currency was also lower versus the pound sterling. The EUR/GBP slipped 0.20 percent to 0.7874.

Strongest Currencies for the Day

forex tradingToday is after two events: the FOMC and the RBNZ. With the statement, Fed was overall more hawkish while the currency of the RBNZ was more bearish. One of the strongest currencies trading today is the NZD as seen in the figures. If the NZD is higher versus the EUR and the CHF, it looks as if Germany will report CPI as of -0.2% MoM against -0.1% MoM; giving justification in some respects that pitted against other currencies, the NZD has changed only a bit.

EUR and CHF appear to be the weakest currencies. They will certainly be moving along together as the pair is presently reduced to 1.2057 and the SNB reported that they will continue to protect the level of 1.2000 vs. their main trading partner.  So it is expected that the lowering of EUR will be the same for the CHF.

The U.S. weekly Initial Claims for the present week will soon be released with the estimate of 285K against 283K. The MA for 4 weeks has to continue nearer the low levels since 2000.  Germany will be giving out the aggregate figure of the CPI at9:00 o’clock this morning with the pieces being released that appeared more like -0.2 to -0.3% against estimate of -0.1% estimate for the month. Chairman Yellen will speak at the same time so any insight from him will be important to consider.

Stocks in Australia and New Zealand Climb

Aussie and NZ stocks went up following the decision of the United States Federal Reserve to finally conclude its asset-purchasing agenda. The Fed believes the country’s economy is formidable enough to withstand global pressures.

The US currency gained versus other currencies as the prices of copper and crude oil fell.

Standards & Poor ASX Index pit in another 0.4 percent in Sydney while the New Zealand Index rose in Wellington also by 0.4 percent.  S&P Index for futures hardly moved after the gauge dropped very slightly at 0.1 percent in the NYSE.

The dollar reached a three-week peak against the Japanese yen and the NZ dollar.

US central Bank officials maintained its commitment to keep primary rates minimal for a certain period. It paid no attention to international economic concerns and pointed to employment gains in closing the unparalleled bond-buying program in October. It will give an update regarding third-quarter GDP.

On the other hand, confidence data in the European region is scheduled today while the Bank of Japan will make a report about fiscal policy.

Indicators suggest that lesser utilization of labor resources is slowly weakening. Meanwhile, there is apprehension that the euro area is going into recession while the economy of China is slowing down.

MSCI World Index declined for a second month. It lost 0.6 percent this month after recovering during the recent two weeks. Value of equities worldwide fell $762 billion in October after losing $1.8 trillion the previous month.