Kweku Adoboli arrested as largest rogue trader in Switzerland

Published on in Foreign Exchange News by


Foreign Exchange Overnight/Morning Ranges:

Currency Rates EUR/USD 1.3784-1.3881

Currency Rates GBP/USD 1.5763-1.5817

Currency Rates GBP/EUR 1.1378-1.1429

Kweku Adoboli will enter the history books alongside Nick Leeson and Jerome Kerviel. The rogue trader has allegedly racked up losses of $2 billion on UBS’s balance sheet but and no client money was involved.

An alleged rogue trader at UBS  was arrested by police following a string of unauthorised trades making this is now the biggest rouge trader loss for a Swiss bank.

Swiss banking giant UBS stated that a rogue trader caused more than a $2 billion, where Police in London have arrested a 31-year-old man called Kweku Adoboliin in connection with the loss. Switzerland’s largest bank UBS warned that it may be looking at reporting an entire loss for the third quarter as a result of the rogue trade Kweku Adoboliin. This rouge trader will cause the share to drop but the news of the losses once announced could send shares plummeting.

Nick Leeson, a British trader working in Singapore for Barings Bank, made unauthorized futures trades that lost more than $1 billion and led to the venerable bank’s collapse in 1995. The infamous case prompted banks worldwide to tighten their internal checks.

The Australian dollar continues to decline versus the US$ as there is increasing speculation that the Australian Federal Reserve may cut interest rates due to a rise in unemployment.

Short term this has been positive for the Euro, however the ECB is now expected to cut rates by 0.5% over time. Stock markets have responded positively, but this is an open admission by authorities/governments that the global economy is being threatened by the problems facing Europe. Sterling is relatively unchanged as market sentiment remains Euro bearish.Central bank action yesterday resulted in gains for the Euro.

The ECB, BoE, BoJ and the SNB increased the duration on their USD lending facilities in a joint attempt to ease the funding pressures that have been building in money markets. This action will ease the recent liquidity problems that European banks have been faced with.

Yesterday the Swiss National Bank decided to hold interest rates at a record low of 2.5% so as to maintain the minimum exchange rate with the euro.

EUR/USD currently 1.3793. Support 1.3600, resistance 1.3900.

GBP/USD currently 1.5787. Support 1.5700, resistance 1.6000.

GBP/EUR currently 1.1428. Support 1.1350, resistance 1.1600.

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