Analysis: US stock market fluctuations are causing an increase in foreign exchange (FX) trading activities in Asia during times when market activity is typically lower, creating a volatile trading environment often referred to as the 'twilight zone'.

Reported 6 months ago

The upcoming changes to the U.S. stock settlement window are expected to disrupt trading for Asian money managers, requiring them to secure funds during early morning hours when currency markets are less liquid and more volatile. As the settlement time shortens, traders in Asia may face challenges in validating trades and converting funds into dollars within a 24-hour timeframe, impacting the $7.5 trillion daily forex market. Market participants are preparing for increased costs and potential risks associated with tighter timetables, with implications on liquidity conditions and transaction costs in FX flows.

Analysis: US stock market fluctuations are causing an increase in foreign exchange (FX) trading activities in Asia during times when market activity is typically lower, creating a volatile trading environment often referred to as the 'twilight zone'.

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