The Low Volatility Taiwan Dollar Is Now Less Volatile

2019년 4월 6일

The already incredible low volatility of the US dollar to the Taiwan dollar somehow over the past few weeks managed to drop volatility even lower than before. The range trading has tightened further from 30.42 to 31 by a tighter range of 30.65 to 30.94. This is truly incredible, even for the foreign exchange market which has suffered (or enjoyed given your financial position) from extremely low volatility compared to other asset classes such as commodities or equities. The question remains if this volatility can be sustained and if so for how long. Clearly, this pair suffers from low liquidity which can be seen by long tails of the candlesticks indicating short-term volatility. Less clear is the fact that this pair is still manipulated by the central bank. Either way, USDTWD is a fairly stable pair to invest in with foreign exchange risk extremely low, at least for now.