High volatility reigns over the FX market

The price fluctuations of the 5.1 trillion foreign exchange market jumped to its highest level in 2016. , according to JP Morgan and CLS Group, which deal with a large part of foreign exchange transactions. As the TradeTech FX conference in Miami begins a week later, the major currency managers gather to discuss whether the turmoil will continue and how it can be countered.

If the high volatility is maintained, it will greatly benefit speculators, while at the same time creating a hedge for trouble.

According to JP Morgan, volatility will return to its normal values ​​after the exceptionally low levels in 2017. As a large number of central banks want to pursue the Fed's policy, the withdrawal of monetary stimuli that strengthens global growth will create large cash flows that could harm the markets.

"Market activity is really rising," said David Putt, CEO of the CLS Group.

CLS devices average $ 2.1tn. currency transactions on a day from Monday to Thursday last week, which is 14% higher than the average in January, added Put.

As markets became more volatile over the past two months, JP Morgan's customers increased the use of the bank's currency algorithms. The number of users trading on the bank's electronic platform is also rising, and for each day of the previous week, their number exceeds the highest level observed in 2017. - said Richard James - Head of Marco Markets London.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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