Foreign exchange updates
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Central banks’ efforts to steady the global economy since the start of the pandemic have lulled the $6.6tn a day foreign currency market into one of its sleepiest periods on record.
As the economic recovery began to take hold this spring and summer, stock markets across the globe rushed higher and government bond prices swung around in anticipation of the direction of monetary policy. Meanwhile, prices in the foreign exchange market moved very little and trading volume fell to multi-month lows. The exchange rate between the US dollar and the euro has this year traded in the narrowest range on record.
That is because central banks globally have moved more or less in lockstep since the start of the pandemic, creating very few chances for currencies to diverge in ways that create opportunities for profit….