Period of Record Low Volatility on Forex Markets About to End as Bank of England and Federal Reserve Consider Raising Rates- Forex Broker Armada Markets Alerts Clients
(PRWEB) August 21, 2014 -- Armada Markets, a global spot Forex and precious metals broker for professional traders today alerted its clients to be cautious in their trading decisions as the period of record low volatility is about to end.
The alert follows the release of Bank of England and Federal Reserve minutes of their last policy-setting meetings in which both central banks raised the possibility of a sooner than anticipated rate rise. In recent years most market participants have become overly comfortable with the low interest rate environment and should now revisit their risk management strategies. Changes in interest rate outlook and ultimately the rise of interest rates should bring and end to the low-volatility environment and introduce higher risk to the market.
Illimar Mattus, CFO of Armada Markets commented:
"I have been in trading business over 17 years and have never witnessed such an extended low volatility environment that we have had over the past years. We have seen something similar in August of 1998 and July of 2007 which were both followed by major market turmoil. When I look at the eurodollar volatility then it is at the lowest level since the very creation of the euro. JPMorgan's Global FX Volatility Index hit also all-time closing low of 5.29 percent on July 3. History tends to repeat itself and based on my past experience I don't rule out a major jump in volatility and thus risk over the coming months."
Ingmar Mattus, CEO of Armada Markets added:
"I believe that the minutes released today by the Fed and BoE mark the turning point as the two of the G7 central banks moved from a dovish bias to a more-hawkish bias. This has brought a lot of uncertainty to the market as it is unclear when and by how much the central banks will move - this will lead us to more volatility. As we like our clients to succeed in trading then we would very much like them to take a second look at their risk management techniques."
Armada Markets alerts regularly its clients on major shifts in market dynamics or outlook. Armada Markets is proud to be the top choice for professional spot FX and gold/silver traders providing them with:
- Industry-lowest spreads with average EUR/USD spread of 0.3 pips
- Industry-lowest retail commissions of 20 USD per million
- Ultra-fast trade execution speed of 300 milliseconds on Metatrader4 platform
- Trading environment where all types of strategies including news trading, scalping and arbitrage are allowed
Notes to Media
About Armada Markets AS (Armada Markets)
With its headquarters in Tallinn, Estonia, Armada Markets provides online spot Forex trading services to professional retail and institutional clients in close to 140 countries. Armada Markets focuses on providing one of the most competitive spot Forex trading conditions in the world with ultra-low spreads and high quality trade execution. Armada Markets is proud to serve its clients 24/7 in 8 languages.
Trading foreign exchange on margin carries a high level of risk and may not be suitable for everybody.
For more information please visit http://www.armadamarkets.com or by phone on +372 686 3163.
Data Sources
- Minutes of Bank of England Monetary Policy Committee Meeting released on August 20, 2014:
http://www.bankofengland.co.uk//publications/minutes/Pages/mpc/pdf/2014/mpc1408.aspx
- Minutes of Federal Open Market Committee released on August 20, 2014:
http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20140730.pdf
Illimar Mattus, Armada Markets AS, http://www.armadamarkets.com, +372 06863163, [email protected]
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