By Harry Robertson and Alun John
LONDON, April 4 (Reuters) – Traders and investors are looking to global interest rate cuts and a closely-fought U.S. election to drag the world’s currency markets from their deepest lull in almost four years.
Measures of historical and expected volatility – how much prices move over a set time period – have sunk in recent months with the world’s biggest central banks stuck in a holding pattern, depriving FX traders of the divergent moves between regional bond yields on which they thrive.
Deutsche Bank’s closely-followed implied currency volatility gauge is around its lowest in two years, and not far off pre-pandemic levels.
“The music isn’t playing in FX so far this year,” said Andreas Koenig, head of global FX at Amundi, Europe’s biggest asset manager. “U.S. (bond market) rates go up and down, but the others all follow, and therefore we have no change in differentials.”
“Who’s cutting first and how far…and then the U.S. elections, will be the FX events, the big macro events,” Koenig said.
Read Full Article Here…(reuters.com)
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