FX dealers face end-of-day trading stress from T+1 shift

Experts say switch to using overnight swaps could be “problematic” and lead to wider spreads


The upcoming transition to a T+1 securities settlement cycle in North America could lead to increased use of overnight swaps at the end of the US day, putting pressure on foreign exchange market-makers to absorb flows at a tricky time for trading and leading to worse pricing.

Under the current T+2 cycle, foreign investors typically use tomorrow-next FX swaps – where a currency is simultaneously bought and sold over two separate business days – to fund the purchase or sale of securities. This is

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