According to analysts at Danske Bank, the patient stance adopted by most major central banks lately continues to limit volatility in the FX sphere and G10 vol continues to drop.
“EUR crosses generally bid yesterday as the lack of trust in ECB’s willingness to put action to its words on its easing options provided support. EUR/USD back around the 1.1250 mark, and EUR/GBP failed to move much lower even as the longer Brexit extension arguably reduces the risk of no deal – instead it drags out uncertainty.”
“A range of global FX vol indices are now back at 2014 levels, hinting that the market is increasingly complacent about risks in either direction. What can drive the next move out of current ranges in the G10 sphere? A trade deal – which looks increasingly likely given that an enforcement mechanism has reportedly now been agreed upon, and an – at least moderate – Chinese recovery could do the trick as this would be a key catalyst for central banks to regain trust in the ‘normalisation’ process.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.