Published 00:48 (GMT) 23 Apr

GBP/USD, EUR/USD Flows: FT: EU warns US on bank ‘protectionism’; Fed Bernanke (XFUC5801)

FT: US plans to force foreign banks to hold more capital are a threat to harmonious global regulation and risk "a protectionist reaction", the EU commissioner in charge of financial services has warned.

Michel Barnier told Fed Ben Bernanke that plans to force higher capital requirements on the US subsidiaries of European banks could lead to retaliation against US banks. In a pointed letter seen by FT, Mr Barnier argued that the Fed plans are a "radical departure" from past US policy and could hamper the international economic recovery. Under the Fed's proposal, which could come into force later this year, large foreign banks would have to ensure that their subsidiaries met a new international minimum level of 7% core capital to risk-weighted assets.

On FX, some focus on the above, for impact on European banks in US. Good to watch. Though little impact on FX now. GBP/USD at 1.5290-92, range of 1.5219 to 1.5293 global range on Monday. Bids at 1.5250-60/1.5200. Offers 1.5300-10, with 2-way interest from Asian accounts, while Sovereign buying on dips to 1.5200 lows. EUR/USD at 1.3060-63, offers at 1.3080-00, Asian, sovereigns, M.E. bids on dips to 1.30 lows. Still range of 1.3000-1.3200 on the wide. WL