UBS Rues Volatility Bursts That Don't Last as China Damps Trades
- `One-off shocks followed by a short window of volatility'
- Widening bid-offer spreads lead to lower trading volumes
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Currency trading is becoming more difficult due to short-lived bouts of volatility and uncertainty over what China will do next to revive its economy, according to UBS Group AG.
While China’s shock devaluation of the yuan this month sent convulsions through financial markets, those gyrations are unlikely to last, said Anthony Hall, regional head of foreign exchange, rates and credit in Asia Pacific at the world’s fifth-biggest currency trader. Investors are seeking to profit from any surge in volatility after stimulus by central banks from Europe to Japan had damped priced swings, he said.