LIVE MARKETS-FX traders' horizons "as short as they've ever been"

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FX TRADERS' HORIZONS "AS SHORT AS THEY'VE EVER BEEN"

The foreign exchange market, so far at least, has received arguably the biggest jolt from Donald Trump's second term as president, with currencies from Mexico and Canada to Europe and South Africa all swinging on tweets, tariffs and turnarounds.

And with the moves proving so short term - look at the back and forth in the Candian dollar and Mexican peso on the will-he won't-he Monday tariff fun, it's hard for traders and strategists to know what to do.

One consequence, sys Dominic Bunning, head of G10 FX strategy at Nomura, is that traders are looking increasingly short term.

“I think traders’ horizons now are as short as they've ever been. I don't think that will persist for the whole of the next four years. But while we're getting used to the tariff implementation that's going to probably remain the case."

What does short term mean?

“I started in 2007 when with a real money-type client you would have conversations about trades that you put on for the year or six months, and three months was a very normal conversation.

"But now, people are talking about the next week and less. You can have a view and you can get stopped out or take profit over a tweet."

"The only way you can manage that is to be incredibly short-term with incredibly tight stops, or try and set yourself very wide parameters, and then the challenge you face there is, well, if it's going against you, how long do you hold on to it?"

(Alun John)

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