Currency managers battered by the failure of most major trading strategies this year are switching tactics.
Bloomberg News reports that Adnan Akant, who has more than 30 years of experience in foreign exchange, said his firm has reduced the size of its positions to react to, rather than anticipate, market surprises, while Robert Savage, a hedge-fund manager and former chief strategist at FX Concepts LLC, is looking for currencies that correlate with other assets such as oil and gold.
Investors have re-calibrated their currency bets this year as tumult in global equities and commodities has undermined technical strategies that rely on past trends to predict the future. Increasing concern that China’s financial turmoil will spill into economies around the world has driven currency volatility to a four-year high.
'Given China and oil are some of the biggest factors that affect everything and they’re somewhat non-transparent, it gives you very choppy markets where trends don’t last very long', said Akant, head of currencies in New York at Fischer Francis Trees & Watts Inc., which has about $38 billion under management. 'It’s a difficult environment, no question about that'.
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