David McNamara: The becalmed currency markets won’t last forever

Given the vast number of elections taking place globally this year, it is somewhat surprising that currency markets have not been more volatile.

The one source of volatility on currency markets has been the yen.

So far this year, trading conditions on currency markets have been relatively steady, with the euro, dollar and sterling all operating in quite narrow ranges.

This is in marked contrast to periods of heightened volatility seen across other asset classes. The sharp (albeit short-lived) equity market rout of early August, the spike in sovereign bond yields amid the French elections, and the rapid hardening of rate expectations in the first quarter, followed by the more recent softening over the past month; all serve as examples of volatility seen elsewhere on markets.