[cppene]

After a number of very strong trends throughout the year, the most remarkable development in FX markets over the past couple of weeks has been the complete lack of any remarkable development other than the new all-time low in $/JPY and
suspected SNB intervention to weaken the CHF. In fact, most currencies have been trading in relatively narrow ranges.

For example, at the time of writing, all G10 currencies are within less than +/-3% from their trade-weighted level on October 1 (including the Yen). And throughout this quarter no clear trend has developed in any of the majors. Just how little has been happening in FX markets recently becomes apparent when juxtaposed with the third quarter, where the performance gap between the best- and worst-performing currency was more than 14% in trade-weighted terms.

While realised volatility has remained stable throughout the quarter, a number of currencies have fully explored the range throughout the quarter. This in turn
made risk management of any trade recommendation difficult. In fact, only those trades with entry points close to the extremes of the trading ranges had a chance of not being stopped out.