BNY Mellon’s Derrick Expects Volatility to Increase in Currencies

The video discusses the potential increase in currency volatility due to thinner market liquidity and trade tensions between the US and China. It highlights the historical context of market volatility during summer months and China's currency policy moves. The discussion also covers the dollar-CNH volatility, policy expectations before the G20 meeting, and China's desire for greater currency flexibility. Trading strategies are suggested, focusing on proxy currencies like the Australian dollar and South Korean won, considering the speculative positions and potential rate cuts.

What is one reason for the expected increase in currency volatility during the summer months?

• Increased market liquidity

• Historical moves by China on currency policy

• Decrease in market volatility

• Stable trade relations between the US and China

What is the expected impact of the G20 meeting on the Chinese yuan?

• No significant changes before the meeting

• Devaluation of the yuan

• Increase in yuan's global dominance

• Immediate strengthening of the yuan

What might happen if the G20 meeting does not go well?

• Decrease in trade tensions

• Ratcheting up of tensions

• Immediate resolution of trade issues

• Strengthening of the yuan

Which currency is suggested as a proxy for trading in light of potential currency volatility?

• Euro

• Japanese yen

• British pound

• Australian dollar

Why might the South Korean won be considered in trading strategies?

• Its independence from Chinese policy

• Its strong correlation with the euro

• Because of an expected rate cut

• Due to its stability