‘Sweet spot’ of volatility seen lifting currency trading

Rising yen: File picture showing US 100 dollar bank notes and Japanese 10,000 yen notes. The yen had its biggest two-week gain since 1998 recently as Japan’s current account surplus attracted investors. – Reuters

SINGAPORE: Volatility in currency markets will be elevated, boosting trading as investors remain fixated with the reaction of central banks to turmoil in financial markets, according to UBS Group AG.

A JP Morgan Chase & Co gauge of global exchange-rate volatility surged to a four-year high of 12.5% on Feb 11 amid concern that monetary policy tools were losing their potency. The market will continue to see “heightened volatility for some time,” said Anthony Hall, regional head of foreign exchange, rates and credit in Asia Pacific at UBS, the world's fifth-biggest currency trader.