This morning just before 8:00 a.m. the euro was trading at 126.30 and over the next hour traded up 184 pips to 128.14, a startling move, especially given the lack of earth shattering economic releases and natural disasters.
“Given that this market trades $29 million per second, $2.5 trillion per day, I can’t imagine what kind of an order it would take to move the euro 150 pips,” says Ken Lazzara, chief dealer at EasyForex.
The U.S. dollar has been on rampage, setting a new high yesterday of 88.485 yesterday, Oct. 28, up from 73.965 on Aug. 1.
For a long while it was fashionable and profitable to bash the greenback, but one of the first traders I know to call the turn is InterbankFX Chief Currency Strategist Rob Booker, who has ridden that bull for some time. (see the September issue’s cover story, Misery Finds Company).
One of Booker’s FX indicators is the Treasury International Capital Data, which tracks international money flows. The most recent report, released on Oct. 16, showed net Long-term securities transactions have been way down. In May, they were $83.2 billion; June: $53.6 billion; in July, it was just $8.6 billion and August: $14 billion.
Last Friday Phillip R. Bennett, former chief executive Refco Inc., pleaded guilty to 20 counts of fraud and now faces life in prison for conspiracy, securities fraud, bank fraud and falsifying filings with the Securities and Exchange Commission. This follows executive VP Santo Maggio’s confession in December, which led to him giving up $23 million. Refco executives Robert C. Trosten, Tone N. Grant and lawyer Joseph P. Collins are still facing charges and, according to the New York Times, are maintaining their innocence.
While this is certainly progress in the two year debacle, I’d like to take this opportunity to point out that the victims have still not been made whole.
More than $100 million in Refco retail customer funds were tied up in this debacle, and those retail traders have “not received a dime” of compensation, says account holder Gail Butler. And Paul Palley, one of the leaders of the Refco Account Holders group that organized on the internet and filed several law suits to get their money back is continuing the fight.
While it’s great that the NFA and the CFTC have increased their efforts to root out fraud by raising the capital requirements for FX dealers, why haven’t they stepped up to fight for these retail traders? As Bennett and Maggio have shown us, it’s never too late to do the right thing. I’d like to see NFA and the CFTC step up and do the same.
