Analysis-US stock changes push FX trades into Asia's 'twilight zone'

SINGAPORE - A shortening of U.S. stock settlement window next week is expected to upend trading for Asian money managers, pushing some to secure funds in the early hours of their mornings when currency markets are at their thinnest and most jumpy.

"There's not a lot of clients trading at that time... not a lot of banks supplying liquidity," he said. Gerard Walsh, head of client solutions for banking and markets at Northern Trust, said tighter timetables could mean a shift in FX flows towards early opening times in Asia's financial centres."That's one of the many permutations that we think might happen...this needs careful attention for what could be years, until markets are in sync again," Walsh said.

The juggling act will be even more acute over weekends or market holidays, and in markets such as South Korea where currency trading stops on holidays. Retail brokers must also position for unpredictable client demand for currencies.

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