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Achieving Nanosecond Speeds Using FPGAs for Market Data Feed Handlers

March 17, 2012 by mikeohara   Comments (0)

FPGAs are gaining acceptance as an ultra-low latency technology to process Market Data.  FPGA chips are able to compute thousands of operations per clock cycle and this allows them to process a message before the previous ones have been fully dealt with.   Called ‘pipelining’, a properly pipelined FPGA design can guarantee to process each byte of incoming traffic with the same latency, even at 100% network saturation.   Processing at the same speed, regardless of data rates is known as deterministic latency.   


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Monetary Policy Week in Review - 17 March 2012

March 17, 2012 by CentralBankNews   Comments (0)

The past week in monetary policy saw 13 central banks reviewing policy settings, with 3 banks changing rates; Vietnam -100bps to 14.00%, Mozambique -125bps to 13.75%, and Norway -25bps to 1.50%.  Meanwhile those that held rates unchanged were: Japan 0-0.10%, Russia 8.00%, USA 0-0.25%, Hong Kong 0.50%, Sri Lanka 7.50%, India 8.50%, Switzerland 0-0.25%, Rwanda 7.00%, Chile 5.00%, and Mexico 4.50%. Japan also announced enhancements to its loan program, and Central Bank News launched a new central banking links list series.

Looking at the central bank calendar, the week ahead features decisions from a number of emerging and frontier market economies; with the central banks of Thailand, Iceland, Nigeria, Egypt, Taiwan, and Colombia all meeting to review policy settings.  Also due out next week is the Reserve Bank of Australia's monetary policy meeting minutes, and the Bank of England's monetary policy committee meeting minutes.   There's also speeches from Fed Chairman Ben Bernanke, and ECB chairman Mario Draghi.

Bank of Thailand
Central Bank of Iceland
Central Bank of Nigeria
Central Bank of Egypt
Central Bank of Taiwan
Central Bank of Colombia

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Banco de Mexico Holds Interest Rate Target at 4.50%

March 17, 2012 by CentralBankNews   Comments (0)

The Banco de Mexico held its overnight interest rate target steady at 4.50%.  The Bank said [Google Translated]: "From the foregoing, the Governing Board considers that the current stance of monetary policy is conducive to achieving the goal of permanent inflation of 3%, so we decided to keep unchanged the target for the interbank interest rate one day. Going forward, the Board will remain attentive to the prospects for growth of the Mexican economy, inflation and financial markets, which in a context of strong monetary laxity in major advanced and emerging countries, could make recommended a relaxation of monetary policy."

The Mexican central bank also kept the overnight interest rate target steady at 4.50% at its previous meeting.  Mexico reported annual inflation of 3.9% in February, up from 3.8% in December, 3.2% in October, 3.14% in September, 3.42% in August, while inflation was 3.28% at the end of June, 3.4% April and 3% in March, and within the Bank's inflation target range of 3% +/- 1%.

The Mexican economy grew 4.5% (3.2% in Q2, 4.5% in Q1) year on year in Q3 last year, up 1.3% (1.3% in Q2, 0.6% in Q1) from the previous quarter, compared to GDP growth of 5.4% in 2010.  The Mexican peso (MXN) is down about 5% against the US dollar over the past year, and the USDMXN exchange rate last traded around 12.67.


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Banco Central de Chile Holds Rate at 5.00%

March 17, 2012 by CentralBankNews   Comments (0)

The Banco Central de Chile kept its monetary policy interest rate unchanged at 5.00%.  The Bank noted: "Domestically, economic activity and domestic demand have tended to outperform forecasts from the latest Monetary Policy Report. The labor market remains tight and nominal wages show increased dynamism. Credit market conditions are stable. Y‐o‐y CPI inflation is above the tolerance range, while core inflation measures are around 3% annually. Short term inflation expectations have risen, but remain around the target over the projection horizon."

Chile's central bank last cut the monetary policy interest rate by 25 basis points to 5.00% at its January meeting.  The Bank last raised its monetary policy interest rate by 25 basis points to 5.25% at its June meeting last year.  Chile reported annual consumer price inflation of 4.2% in January this year, compared to 3.7% in October, 3.3% in September, 3.2% in August, 2.9% in July, 3.4% in June, 3.3% in May and 3.2% in April last year; within the Bank's inflation target of 2-4%.  

The Chilean economy grew 0.6% in the September quarter (1.4% in Q2, 1.6% in Q1), placing annual GDP growth at 4.8% (6.6% in Q2, 9.9% in Q1).  The Chilean Peso (CLP) has gained about 1% against the US dollar over the past year, while the USDCLP exchange rate last traded around 483.

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National Bank of Rwanda Holds Interest Rate at 7.00%

March 17, 2012 by CentralBankNews   Comments (0)

The National Bank of Rwanda held its key repo rate unchanged at 7.00%.  Bank Governor, Claver Gatete, said: "The monetary and exchange rate policy implemented to date continues to sustain Rwanda's macroeconomic stability. The financial sector is sound and resilient to external shocks, inflation remains moderate and the Rwandan Franc is stable.  In the second quarter of 2012, headline inflation is expected to remain stable as a result of pursuing tight monetary policy, good coordination between the monetary and fiscal policies and other Government policy measures aiming at mitigating exogenous supply shocks that include high oil prices and sovereign debt in the Euro zone."

The Bank previously increased the repo rate by 50 basis points in November and October, meanwhile the bank last reduced the interest rate 100bps to 6.00% in November last year.  Rwanda  recorded annual inflation of 7.85% in February, compared to 7.5% in August, 5.82% in June, and just 1.09% in January last year.  According to IMF data Rwanda saw annual GDP growth of 5.39% during 2010, meanwhile the IMF recently scaled down its growth estimate for Rwanda to 7% for 2011, from a previous forecast of 7.5%.  The Rwandan Franc (RWF) last traded around 607 against the US dollar, having weakened about 1% so far this year.

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March 17, 2012 by The Currency Kid   Comments (0)

Initiatives such as ‘swift’ confirmation, Iban, enforcement of proper identity checks and usage of special codes ensure that the payment process is secure
The transfer routes between the UAE and India and Singapore and the Philippines are considered the top two remittance paths in the world. A MasterCard Worldwide report notes that India received $49 billion in remittances from the UAE in 2008, while the Singapore- Philippines corridor recorded transactions of $6.98 billion in the first five months of 2009, a 2.8 per cent growth over the same period in 2008. Picture used for illustrative purposes only
A regular money remitter himself, Michael Obenieta never thought a simple act of charity could cause him so much stress. Last month, the US-based expatriate wired money online for his brother-in-law in the Philippines. Even before the bene-ficiary could collect the money, someone else had already claimed it in another location.
Obenieta is still clueless as to how his money somehow got diverted and landed in the wrong hands. “Whatever happened to the promise of security in online transactions?” he asks. Whatever the cause of the failed transaction, it serves as a cautionary tale that no matter how advanced payments technology seems to be today, nothing is infallible. And while this happened outside the UAE, it doesn’t guarantee all your transfers are foolproof.
Sending money is part of life overseas. From helping dependent families, sending gifts of money, building a dream house to meeting other financial obligations back home, most expatriate workers in the UAE need the services of a remittance company.
Repatriated funds have become an influential force in the economy of many countries including India, Philippines and Mexico. Worldwide remittances in 2008 stood at $443 billion (Dh1.62 trillion), about 70 per cent of which is estimated to be flowing into the developing economies.
The transfer routes between the UAE and India and Singapore and the Philippines are considered the top two remittance paths in the world. A MasterCard Worldwide report notes that India received $49 billion in remittances from the UAE in 2008, while the Singapore-Philippines corridor recorded transactions of $6.98 billion in the first five months of 2009, a 2.8 per cent growth over the same period in 2008.
Security breaches:
A huge chunk of such funds goes through wire transfer outfits, many of them small mum-and-pop companies. A comprehensive study released in 2008 by Panda Security, a provider of security software for consumers and businesses, looked into over 300 money transfer firms to see how secure their businesses were.
It revealed that these firms were extremely prone to security breaches. It found that the computers which stored very sensitive information were unsafe as they had outdated antivirus protection and were often used by the company staff for other purposes such as internet chats and downloads.
“These computers are not secure for transactions. This lack of security could allow criminals to intercept authorised remittances,” the firm said in a statement.
Banks and remittance companies in the UAE, however, assure that their transactions are secure so they guarantee that any remitted money will reach the intended beneficiaries. Marc Aubry, Western Union vice-president for marketing in the Middle East and Africa, said they have put in place a number of initiatives to prevent consumer fraud — from enforcing proper identity checks, using special codes, training their staff to educating their own customers.
Senders are given a Money Transfer Control Number (MTCN) which is unique to a transaction and which the consumer communicates in private to their receiver. Agents are also trained to screen money remitters and try to discourage those that obviously deal with strangers (i.e. those who send money as payment for goods to people they have no personal knowledge of).
“Our internal policies and procedures are regularly reviewed to safeguard against fraudulent activity and we frequently update our agents to assist them in recognising potential consumer fraud at the point-of-sale. We also have a team of security and customer service personnel who are dedicated to managing and preventing consumer fraud.”
Several checks:
At First Rate FX, which offers money transfer service, each transaction goes through a number of security checks and secure payment systems. Every transfer generates an official bank document called Swift (Society for Worldwide Interbank Financial Telecommunications) confirmation or MT103, which are useful for tracing the funds after they have left First Rate FX.
The beneficiary can use this official confirmation to trace the funds until they eventually reach the intended account. Not only that, the company also holds a full insurance policy which covers all eventualities. “This insurance policy covers every transaction and ensures against any payment which is sent to the incorrect person, or sent in a fraudulent transaction,” says Chris Canning, currency analyst at First Rate FX.
Rashid Ali Al Ansari, general manager of Al Ansari Exchange, says they follow international standards of security from screening of remitters and recipients to transmission of payment orders. “The payment order invariably specifies the details of the intended beneficiary. Therefore, funds can only be released to the intended recipient at the paying end. This is done by requesting valid identification documents from the recipient/beneficiary,” he says.
“Most of our tie-up banks have systems that enable us to track the status of transactions, whether successfully processed or not. Rejected transactions, such as those having incorrect account details, incorrect name are returned to us by our correspondent banks/agents.”
Richard Musty, managing director at Lloyds TSB in the Middle East, says bank-to-bank transfers have been made secure through the use of Swift. Additionally, the implementation of International Bank Account Numbers (Iban) provides a security boost, as it contains validation which easily allows banks to verify whether an account number is correct before any payment is processed.
“We also take steps to ensure that the payment instruction process is secure. We implement tight controls over our internet banking and other payment channels, and put numerous checks in place to ensure all information relating to the transfer is sent in an accurate and timely manner. This includes carefully checking every payment instruction and transfer form we receive and assisting our customers in ensuring they complete the necessary payment forms correctly.”
Paul Styles, solutions consultant at ACI Worldwide agrees that remittance payments have typically generated negative perceptions among banks. “Now however, the bank-owned cooperative, Swift, has sought to tackle this and has launched the SwiftRemit service. This enables banks to give customers clear and upfront transparency on total cost and execution time.”
Tracing wire transfers:
If your money does not reach the desired destination, you should contact your provider immediately. Generally, you will be asked to make a complaint through the customer service department so that the wire transfer company or bank can trace the transaction.
>> “Once you make a complaint, the operations department will start tracing the transaction, to find out where the mistake might have taken place, whether it’s from our side or not,” says Osama Al Rahma, general manager at Al Fardan Exchange.
>> “If nothing went wrong in our side of the transaction, we will liaise with the corresponding banks (or agents) to investigate why the money has not been credited to the beneficiary.” The whole process should take about 48 hours and during that time, there’s nothing you can do but wait. “We need to see what happened first,” says Al Rahma.
>> If the reason for the delay was that your money was given to a wrong person due to the bank or agent’s mistake, you can definitely get your money back. “If the paying bank or agent has made a mistake in identifying the beneficiary, they are legally obliged to return the funds to us as per the written agreement,” says Rashid Ali Al Ansari, general manager at Al Ansari Exchange.
>> “If for any reason they fail to return the fund, then legal means are taken to get the funds back. In other words, the funds will be refunded in full to the sender,” Al Ansari assures.
>> Depending on the bank or money transfer company you are dealing with, you can also request an official MT103 confirmation, an official bank document which traces a wire transfer. This provides the bank with enough details to locate the exact location of the funds until they reach the beneficiary.
Conmen look for soft targets
Despite so many warnings issued, many people still fall prey to scams linked to money transfers.
A research by the office of fair trading in the UK showed that 39 per cent of people who lost money to a scam were victims of a money transfer or advance fee fraud. “The conmen often deliberately target older people or people who are especially vulnerable,” says Esther Rantzen, who has spent years exposing scammers.
How these scams work:
Victims get an unsolicited phone call, email, letter or fax from someone notifying them they’ve won a lot of money. The scammer gains their trust and explains that, in order to collect their winnings, they first have to send a small sum of money back to pay for processing fees or taxes. Once the money is sent, they never hear from the person again.
Victims get an unsolicited cheque or money order with directions to deposit the money and immediately wire a portion of it back to cover processing fees or taxes. Weeks later, victims learn the cheques are counterfeit, but they have already wired the money to cover the taxes and can’t get it back.
To protect yourself from a scam
If it sounds too good to be true, it probably isn’t
Don’t rush into sending off the requested funds.
Ask yourself how likely it is that you have been especially chosen for this offer.
Think about how much money you could lose from replying to a potential scam.
If an offer sounds dubious, speak to family or friends and seek advice.
By Cleofe Maceda

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March 17, 2012 by The Currency Kid   Comments (0)

It isn't often you witness a major currency going into meltdown. But it's happening now, on a grand, multi-country scale.
The collapse of the euro could trigger a global financial earthquake. Its tremors and aftershocks will be felt in every corner of the world, from the US to China to the UAE.
It will also have massive implications for expats in the UAE, especially those who are paid in US dollars but regularly have to shift money to their home currency.
EU politicians seem incapable of saving the single currency. So what can you do to save yourself?
Most people don't worry too much about currency movements until they live and work abroad. Being paid in one currency and having financial interests in another certainly focuses the mind.
If you are looking to transfer a large sum, a shift of just a few foreign exchange (FX) points can become a matter of dramatic interest.
The wrong movement at the wrong time could easily cost you thousands of dollars.
This wasn't such a big problem before the financial crisis, when currencies were relatively stable and sharp movements pretty rare.
The credit crunch changed that. Some currencies plunged, notably the British pound. Others have remained inexplicably strong, notably the euro. The world's reserve currency, the US dollar, has been frustratingly weak.
If you are looking to send money overseas, you will be watching the antics of EU politicians and crossing your fingers for a dollar rebound, not just against the euro but other currencies. But are you likely to get it?
The most astonishing thing about the latest leg of the financial crisis is that the euro has continued to stand bafflingly firm.
In January, the euro hit a low of US$1.31 (Dh4.81), but steadily rose to $1.47 in May, even as the single currency crisis worsened. It has recently dipped to below $1.40, but this is far from the all-out rout you might have expected.
If street riots in Greece and Silvio Berlusconi's Bunga Bunga parties haven't torpedoed the euro for good, what exactly can sink it?
A lot of investors and analysts have been scratching their heads over the continuing strength of the euro, says Chris Towner, the director of FX Services at HIFX, a currency transfer service. "The simple answer is that it has remained strong on the back of hopes that EU leaders will find a concrete solution to the sovereign debt crisis."
Those hopes are fading fast, but another factor keeps it strong. Germany. With Europe's solid-headed export powerhouse backstopping the single currency, surely it can't fail?
The European Central Bank (ECB) has played its part in propping up the euro. Unlike the US Federal Reserve and Bank of England, it has remained unfashionably attached to the principle of sound money, shunning the lures of quantitative easing (QE) and keeping interest rates relatively high.
You can probably thank the Germans for that as well.
As the latest euro zone bailout unravels and Italy's debt spirals out of control, it looks like the single currency may finally be facing its Waterloo.
Only two things can save the euro and neither of them appears feasible, Mr Towner says. "The first is full fiscal integration, but this can accurately be described as impossible in the current conditions," he says. "The other is to have the ECB print vast sums of money under QE. This is also something of a non-option, however, as it is illegal under the EU constitution."
Another massive obstacle stands in the way. "Germany still shudders at the memory of hyperinflation under the Weimar Republic and would reject any move to force it to pay the debts of its poorer southern neighbours."
Germany has given the euro its strength, but, paradoxically, it may destroy it. "One thing seems certain, the death of the euro as we know it is only a matter now of when, not if," Mr Towner says.
By the time you read this, it might even be dead. If so, apologies. Events move fast these days.
Anybody thinking of shifting their US dollars into euros will be avidly watching the euro zone tragicomedy.
They might also consider that events are moving in their favour and time is on their side. The crisis can surely only worsen, so if you're patient, you might find an even better time to make that currency transfer.
Yet a revival in the US dollar is far from guaranteed.
As the world's reserve currency, its fate partly depends on investors' attitude to risk, says Chris Canning, the head of private desk at First Rate FX, a currency service. "When the global economy is in trouble, investors buy into the US dollar because they see it as a safe haven," Mr Canning says. "When things improve, they shift into riskier currencies in the hope of getting a better return."
This makes dollar movements volatile and difficult to call. Its fate doesn't depend as much on the state of the US economy than the strength of everybody else's economy.
The dollar may have gained ground against the euro, but it isn't a very impressive comeback. "The prospects for the US dollar still don't look good," says Gaurav Kashyap, the head of the DGCX desk at the Dubai-based Alpari ME DMCC, an online trading brokerage.
The US has posted some impressive growth figures recently, but this may actually harm the greenback. "Wall Street has enjoyed a very good earnings season and economic data suggests that conditions will continue to improve," he says. "If we continue to see good jobs growth, we can expect to see the US dollar struggle further."
Have you got that? A US recovery will spark a slide in the dollar because it suggests the global economy is on the mend and investors can, therefore, take a chance on riskier assets. No wonder so many expats find it so tricky to time their currency transactions.
QE3 is another wild card. If the Federal Reserve decides to kickstart the US economy by embarking on another round of virtual money printing, the dollar could go all wimpy again.
Even if it does beef up against the euro, that doesn't mean it will hang tough against the British pound or other favoured expat currencies, such as the Australian dollar.
In January 2009, $1 hit a high against the Australian dollar at $1.56, a rate that must look like ancient history to Australian expats. Today, the two currencies are at parity. If you're an Australian looking to send your US dollar earnings back home from the UAE, that's got to hurt.
The US dollar has rallied slightly against the Australian dollar, but don't expect it to last, Mr Kashyap warns. "Economic data from Down Under remains pretty solid and we expect to see the Aussie dollar make another move towards those all-time highs," he says.
If China continues to grow strongly, that will also help bolster the Australian dollar because of increasingly close trade relations between the two countries, he says.
The US dollar is set to cause further agony among expats by remaining relatively weak against the New Zealand and Canadian dollars, Mr Kashyap says. "The Aussie, Kiwi and Loonie are all commodities currencies and will, therefore, find support from higher commodity prices."
Ironically, the best hope for those wanting to see their US dollars go further is for euro zone contagion to drive investors back to the world's safe-haven currency, says David Kerns, a private client dealing manager at Moneycorp. "A slowdown in Asia could also help those sending money back home, but I really can't see that happening in the short term."
But what if the US dollar loses its role as the world's reserve currency? Some claim the Chinese yuan is poised to take its place, but Mr Kerns can't see this happening any time soon. "The yuan is still pegged against the dollar and it isn't traded outside China, which seriously limits its global use. Until that changes, the US dollar will remain the world's first-choice currency in times of global distress."
This means that bad news for the global economy is good news for dollar-rich workers in the UAE. Every time global sentiment improves, your dollars will weaken.
Given the bad news coming from the euro zone, sentiment could be shifting in your favour.
If you're looking to send currency back to your home country, exchange rates can become an obsession. You might find yourself checking those online FX sites several times a day, looking for the perfect moment to place your trade.
Mr Kerns says that trying to accurately time today's currency madness is impossible. "If you have to make regular payments overseas, your best option is to lock into a favourable rate through a currency specialist. They can also offer advice on the best time to make transfers abroad," he says.
Nobody knows how the euro zone tragedy will play itself out. Greece and Italy could peel off, swiftly followed by Portugal and the rest of the Club Med strugglers.
It could be reduced to a rump of Germany, the Netherlands, Austria and Finland. Or maybe Germany will return to the deutschmark.
Or perhaps it will be saved after all, by a very un-Germanic blast of interest-rate slashing and money printing.
Right now, absolutely anything could happen. So keep watching those FX sites. If you spot an attractive rate, you might want to lock into it. That will allow you to make regular transfers home for up to 12 or 24 months at a fixed rate, without having to worry about the next move in currency markets.
The rest of us will keep on watching to see how currency rates are affected by the latest euro zone plot twist.

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