By Madeleine Lim 
   Of DOW JONES NEWSWIRES 

NEW YORK (Dow Jones)--Citigroup Inc. (C) has reached an agreement to sell its LavaFX foreign-exchange electronic trading platform to FXall, according to a statement Monday by FXall.

Terms of the deal weren't disclosed.

FXall is an electronic currency trading platform for users like institutional investors, offering them access to currency quotes, products and services from 70 banks, according to the firm's Web site. Some 800 institutions trade through FXall, including broker-dealers, hedge funds and large asset managers.

FXall said that through the acquisition of Citi's LavaFX, its client base will total 1,000.

Phil Weisberg, chief executive of FXall, said in a telephone interview that initially, the firm will continue to run the two systems separately, aiming to integrate the trading software later this year.

Weisberg also said he hopes to encourage banks to use the system for their own trading needs, rather than only as a channel for pumping prices to their clients.

He added that he expects to see a generally heavier regulatory burden on foreign-exchange trading in the coming years.

Multibank trading platforms such as FXall and LavaFX are gaining an increased foothold in the highly liquid $3.2 trillion-a-day currency markets, although ICAP PLC's (IAP.LN, IAPLY) EBS trading platform still accounts for a majority of spot currency trade in the major currency pairs, such as euro-dollar and dollar-yen trade.

Tom San Pietro, LavaFX chief executive, will join FXall as head of active trading.

-By Madeleine Lim, Dow Jones Newswires; 212-416-2222; Madeleine.lim@dowjones.com

(Katie Martin in London contributed to this article.)

The Euro extended the advance from the previous day and rallied to a fresh weekly high of 1.3795 during the overnight trade as the economic docket reinforce an improved outlook for the region. Meanwhile, EU President Jean-Claude Juncker acknowledged that the Euro-Zone needs new instruments to avert future crises, but argued that creating a European Monetary Fund would not solve the debt issues with Greece and that it would be “meant for more broad-based crises.”

Talking Points
•    Japanese Yen: Maintains Range Against Greenback
•    Pound: BoE Sees Rise in Private Spending
•    Euro: Industrial Outputs Expand the Most in 20-Years
•    U.S. Dollar: Retail Sales, U. of Michigan Confidence on Tap

Euro Rallies as Growth Prospects Improve, British Pound Extends Rebound

Industrial outputs in the euro region surged 1.7% in January to mark the biggest expansion since August 1989, while the annualized rate increased for the first time since April as production jumped 1.4% from the previous year. However, wholesale prices in Germany tipped 0.1% in February, which fell short of expectations for a 0.3%, while the index advanced 2.1% from last year, and subdued price pressures could lead the European Central Bank to maintain a neutral policy stance going into the second-half of the year as they maintain their one and only mandate to ensure price stability. Nevertheless, Bundesbank President Axel Weber argued the Governing Council needs to conclude its emergency measures as soon as the recovery takes hold during a panel discussion in Germany, and the ECB may continue to normalize policy over the coming months as growth prospects improve.

The British Pound rallied for the second-day to reach a high of 1.5171, but the exchange rate is likely to maintain a narrow range going into the following week as the Bank of England is scheduled to release its policy minutes on Wednesday at 10:30 GMT. Meanwhile, BoE Chief Economist Spencer Dale held an improved outlook for the U.K. and said that there are “some tentative signs that nominal spending in our economy is starting to accelerate” as the expansion in monetary and fiscal policy continues to support economic activity. In addition, Mr. Dale argued that “much of the impact of our asset purchases is still to come through,” and went onto say that “the most difficult decision will be to decide the timing of the withdrawal” of the emergency measures.

The greenback weakened across the board, with the USD/JPY slipping to a low of 90.16 during the European trade, and the reserve currency could face increased selling pressures going into the North American session as the economic docket is expected to reinforce a dour outlook for the world’s largest economy. Retail spending in the U.S. is anticipated to contract 0.2% in February after rising 0.5% in the previous month, and the data could stoke a weakened outlook for future growth as private consumption accounts for more than two-thirds of the economy. Nevertheless, the U. of Michigan confidence survey is projected to increase to 74.0 in March following the unexpected drop during the previous month, while business inventories are forecasted to rise 0.1% in January.

Today's Market Outlook 3/23/10

EURUSD

Continues to trade within broader 1.3433/1.3816 consolidative range. The latest strong sell-off from 1.3816 found support at 1.3462 yesterday, just above 1.3433 range bottom, ahead of current recovery phase. Higher low is now required to resume towards 1.3586/1.3639, with break of the latter to trigger stronger recovery. However, overall outlook remains negative and upside failure to attract 1.3433, then 1.3250/1.3088.

Res: 1.3568, 1.3586, 1.3600, 1.3625
Sup: 1.3501, 1.3462, 1.3433, 1.3423

USDJPY 2/23/10

Remains locked in 89.74/91.08 consolidation range, with positive bias seen in play while 89.74 support holds. However, sustained break above 90.79/91.08 is needed to resume short-term recovery and focus 92.13 next. Loss of 89.74 would weaken the structure and risk test of 88.13 instead.

Res: 90.37, 90.79, 91.08, 91.22
Sup: 89.74, 89.62, 89.45, 89.30