Published at 00:32 (GMT) 27 May
Richmond Fed Pres Jeffrey Lacker, FOMC voter, hawk, says policymakers must let financial firms fail in order to restore market discipline. US Banking system favours too-big-to-fail financial institutions.
Fed emergency lending ability must be repealed. More regulation is not the way to make financial system safer. Backs system with no government rescues and investor manage risks.
Lacker does not comment on economic outlook and Fed policy.
On FX, little reaction to Fed hawk Lacker comments - more on regulatory framework. Also possibly signalling that firms should be aware of risks when Fed starts to raise rates this year. And firms should be allowed to fail if they are not disciplined in managing such market risks? Lacker also signaling hopes for "lighter touch" kind of regulation? And amidst recent calls by Senate Banking Committee Chair Richard Shelby for more Congressional oversight/ scrutiny on Fed.
USD INDEX looking firm around 1-month highs, now at 97.233. It hit 1-m highs 97,355, highest level since 97.558 on April 14. Eye test of 97.50 - given recent hawkish comments from Fed Vice Chair Stanley Fischer - backing Fed Chair Janet Yellen on rate hikes.
USD/JPY at 123.04-05, looking firm, little reaction to BoJ minutes - more later. Eye 7-year 10-month highs of 123.33 seen on Tuesday. Then 123.40-50, 123.50 Options.
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