news archive

Return of volatility…

Talk about (a lack of) currency volatility has been all over the financial news in recent weeks as volatility amongst the major currencies fell to its lowest levels since 2007 (see chart below). Following the last week’s discussion about sterling’s ride on low volatility, this week we look at the wider implications of the low volatility environment on currency markets.

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Has Cable Finally Cracked?

Last week’s push in GBPUSD towards the psychological 1.70 level failed, as sterling trailed the euro lower, following dovish statements from the ECB. Does this represent the end of GBPUSD’s impressive year-long rally? A statistical perspective on what is driving GBPUSD casts some doubt on this notion…

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2007 Redux: Examining the risk of another global financial crisis…

Canadian economist William White is not a household name like Mark Carney, Mario Draghi or Ben Bernanke, however he probably should be.  White, the former chief economist of the Bank for International Settlements (BIS), began his career at the Bank […]

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Is ‘long GBP’ the new ‘short EUR’?

As an increasing number of market commentators switch their GBP forecasts from bearish to bullish, we look back and explain why the consensus view isn’t always the best indicator of what is likely to happen in the markets.

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Sterling’s Ticking Time Bomb…

The UK’s current account balance is now approaching a record low. In fact, in the second half of 2013, the deficit was the biggest for any six-month period since World War II.

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Central Banks causing confusion…

After last month’s Fed meeting, markets had begun pricing in an increased probability of a sooner than expected rate hike. However, the minutes from the meeting, revealed last week, suggested that this is unlikely to be the case. In this week’s report, we take a closer look at what these fluctuating expectations mean for the financial markets in the short term before considering the longer term implications of such extreme policy measures.

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The €1 Trillion Question…

There are two ways to interpret the ECB’s statement (and modelling exercise):
1. Take it at face value, as a statement of intent to launch a European QE programme imminently; or
2. Treat it with a healthy dose of scepticism, as simply another attempt to talk down the value of the Euro.

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2014 1st Quarter FX Update

Looking at the first quarter and evaluating our forecasting performance to date… .

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Dollar rises as Yellen hints at tighter policy

Last week, Fed officials revised their median forecasts for the Fed Funds rate in December 2015 from 0.75% to 1%. Meanwhile, the median forecast for December 2016 was revised from 1.75% to 2.25%. In this week’s edition of Risk Insight, we take a closer look at what this and George Osborne’s UK budget means for the GBP/USD exchange rate.

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The Yuan and FX Volatility

The Chinese central bank widened the Yuan’s trading band on Saturday. Could increased USDCNY volatility lead to a more generalized Volatility spike?

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