Bloomberg BFIX introduces first value T+1 FX fixing rates

On May 28 2024 the US securities settlement was accelerated to T+1, a move that raises the risk that transaction funding may not occur in time, due to dependency on FX settlement processes involving trade matching, confirmation and payment, all to be completed within currency cut-off times.

The new BFIX value T+1 rates will enable users to send FX orders into their executing counterparts without being physically present in the designated time zone. While sell-side banks can currently offer this service through forwards desks on a T+1 basis, taking opposite risk from the spot desk on a T+2 basis, the forwards desk inherits a ‘tom next’ FX swap which may ultimately impact banks’ credit facilities when done in sizable volumes.

Using BFIX T+1 benchmarks, banks can seek to match or ‘net’ orders to reduce credit impact at scale.

“Providing a solution to what will be a very challenging process for the FX market is where the Bloomberg Index team steps up to meet client needs,” said Colin Gallagher, BFIX benchmark and currency indices product manager at Bloomberg Index Services. “With extensive use of BFIX in currency derivative products, accurate date alignment and a stable window environment for bank execution, BFIX is now a well-established FX benchmark clients rely on globally and BFIX T+1 is a natural evolution to our offering.”

The initial launch includes 20 deliverable currencies against the United States Dollar (USD), including Australian Dollar, British Pound, Czech Koruna, Danish Krone, Euro, Hong Kong Dollar, Hungarian Forint, Israeli Shekel, Japanese Yen, Mexican Peso, New Zealand Dollar, Norwegian Krone, Offshore Deliverable Chinese Renminbi, Polish Zloty, Romanian Leu, Singapore Dollar, South African Rand, Swedish Krona, Swiss Franc, and Thai Baht.

Bloomberg FXGO, the firm’s multi-bank FX trading solution, will be facilitating client auto-routing ticketing.