Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Currency Markets Are So Sleepy That HSBC Is Out of New Ideas

ForexApr 18, 2019 02:01
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Currency Markets Are So Sleepy That HSBC Is Out of New Ideas

(Bloomberg) -- Foreign-exchange markets are so quiet that HSBC’s strategists are drawing a blank.

“We are in an unusual position in this month’s FX Tactician, deciding for the first time not to introduce a new trade idea for the month ahead,’’ Daragh Maher, the bank’s U.S. head of currency strategy, wrote in a note to clients. “In part, this reflects the lack of volatility evident in G10 FX markets which means we have neither hit our take-profit levels nor our stop-loss in the trades we entered in January, February and March.’’

The lack of movement in the markets means that implied three-month volatility for G7 currencies is running two standard deviations below its long-run average, according to an index from JPMorgan (NYSE:JPM). The lack of gyrations bedevils traders taking a position on directional swings between pairs, and pushed influential investors to wager on continued tranquility to generate returns in a low-volatility environment.

Adding insult to injury: the lone source of shockwaves in 2019 -- the British pound -- has seen market expectations for near-term swings crater after the European Union and U.K. agreed to a Brexit deadline extension. No wonder currency-only hedge funds are a dying breed.

HSBC still has confidence in its previous recommendations, Maher said in his note, which include selling the Aussie dollar against the greenback, buying the U.S. currency versus the Canadian loonie, and shorting the euro relative to the Japanese yen. David Bloom, head of global foreign-exchange strategy at the bank, adds that borrowing euros to buy dollars is the “greatest carry trade in the world” in light of the interest rate differential.

Currency Markets Are So Sleepy That HSBC Is Out of New Ideas
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email