After uneventful years in the foreign exchange market, the recent developments in this sector remind Thomas of the extreme market swings about four decades ago, amid the Plaza Accord and the Louvre Accord in 1985 and 1987, respectively, with a lot of interesting parallels. Among the issues, the most striking comparison is the major spike in inflation, the biggest shock since the 1980s.
What is important to understand is that, when inflation goes up, it becomes a massive policy issue and policymakers in governments - in particular, central banks – are under enormous pressure. Measuring how populations respond to inflation is not easy.
He concluded that the success of currency investors depends on market conditions. They need to be critical and agile in an environment of big risk premiums, momentum, and sharp reversals.
The webinar was held on May 25, 2022 in collaboration with The Family Office Co. Bsc (c) and was moderated by Naji Nehme, Chief Investment Officer at Petiole Asset Management.