| Foreign exchange markets are suddenly in turmoil. The Swiss franc jumped 30% in a matter of minutes last month. Over the past year, the Russian rouble has fallen 40% against the dollar, while the Canadian and Australian dollar have recently dropped to six-year lows against the greenback. These shifts have proved costly for many in the markets, with Alpari, a foreign exchange broker going bust, while Everest Capital, a fund manager, had to close its main hedge fund after suffering heavy losses. Why has currency volatility got worse?
These shifts follow a long period in which currency markets have been relatively calm. There are two reasons for the recent volatility. The first is a divide between the Federal Reserve and the developed world’s other two big central banks—the Bank of Japan and the European Central Bank...............................................Full Article: Source
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