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
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