EUR/JPY eases back now Fixing is done
This is how it usually works, and please try not to be too shocked if you hear of banks trying to manipulate the market
- Corporates put in their orders for transactions to be filled at the Fixing rate
- Banks collate these orders and let’s say there is a net interest to buy EUR/JPY at the fixing rate
- They obviously want to sell to their customers at the highest possible price so they try to drive the market higher into the Fix
- As soon as the Fixing is over, the energy falls out of the market and it pops back to where it was before
That’s why I could never understand why corporates traded in this manner, but some are presumably tied by their inhouse rules and have to trade at the Fixing rate.