Fixings - what are they, what happens?

[Andersxman]

Hi, last friday, apparantly, there was a big "fixing" at 17:00 CET... I spoke to a person about this, so I have no link to offer. Apparantly, what happens is this: large companies who have foreign exchange exposure, inform their bank (or whatever) that they need to buy X amounts of USD (or other currencies) on a specific date, and they declare that they will be doing it at the prevailing market rate at a specific time, which apparantly was 17:00 CET on friday.... If I am not mistaking, many companies needed to buy USD on friday (but this I am very unsure of, maybe in reality they needed to sell them, dunno) - because they had to make payments for goods in USD (but it could easily have been the other way around, but let's immagine that the companies needed to buy USD.).. If this is the case, then the banks know that they will have to sell usd against other currencies at that time.. So if the banks can buy USD cheaply in the market, they would be able to buy USD low, and sell them at the higher rate... So maybe they have an interest in trading fx. EURUSD up, so they can take a short position (short EUR, long USD) at fx. 1,3100 around 15:00, and then let it trade down before 17:00, and then unload the purchased USD at the higher rate to the companies...

PLEASE NOTE: I am very unsure about how this whole thing works, but I am quite sure that it is actually occuring in the industry...And that big players use this flow info to take positions - but I am not sure that my attempt at a a description above is correct in any way... I don't know what the companies might be doing in terms of forward outright trades to cover themselves, but that is a little besides the point.

Does anyone know anything about this? I would like to understand thie phenomenon better.