Another major side effect of the lack of volatility in the FX market is that it drives investor capital out of the asset class in search of better returns elsewhere. This of course has the unfortunate effect of reducing volumes and volatility even more.
Equity markets have been roaring ahead across the globe and there have been plenty of opportunities for investment managers to make a profit.
It’s been much more difficult in the FX space; traders can sit on their hands and wait for their opportunities but managers have mandates to fulfil and must try to make their monthly returns even in the face of very limited opportunities.