‘Idiotic' and ‘gratifying', are not adjectives commonly applied to financial markets, but they have been used recently to describe the state of FX rates.
The world of currencies remains a mystery to much of the retail world, rearing its ugly head only when equity or bond funds surprise in returning less or more than expected thanks to FX fluctuations, or when holidays must be shortened because weak pounds do not buy so many euros. Chris Jones, chief investment officer at fund of UCITS funds manager Key Asset Management, welcomes FX managers: “There is a lot of alpha you can get out of currencies.” But their markets can react quite unexpectedly at times. Case in point: the yen should fall when Japan suffers both earthquake and tsunami, ...
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