Forex Flash: A reason behind such a low volatility - RBS

By FXstreet.com,  November 26, 2012, 07:12:00 PM EDT

FXstreet.com (Barcelona) - "Keeping FX volatility not merely suppressed but utterly crushed is the ever wider and
tighter grip that central banks globally are starting to take on their currency," says Head of Currency Strategy at RBS David Simmonds. "Might we soon be in a world," Mr Simmonds expands: "where diversifying FX reserve manager in Country ( A ) buys a carry currency directly from a currency-competitiveness-protecting central bank in Country ( B )?."

This might explain why in such cases like in the GBP/USD we recently saw lows in daily volatility no seen since year 2002, "So it's not just that market volatility is suppressed - there is no market! I exaggerate but only slightly," the analyst argues.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

Referenced Stocks: A, B



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