Riding the Currency Tide

“Historically, G-10 central bankers were in agreement,” says Wolfgang Koester, CEO and co-founder of foreign exchange (FX) analytics software vendor FiREapps. They almost universally thought: “‘Whatever is going to happen in the currency markets, we’re going to ensure it’s a concerted effort and we’re going to control the markets so that volatility doesn’t create unnecessary risk.’”

But now that attitude seems a relic of times past. “We haven’t heard that sentiment since the Swiss National Bank made an unconcerted decision to manage their currency,” Koester notes. “Even [European Central Bank president] Mario Draghi made the statement a couple months ago that volatility is here to stay. If somebody like Draghi comes out and bluntly states that, you know everybody is in it for themselves.”