Tag: 貨幣市場

South Korea's finance minister stepped up his warning on Monday after the won extended its decline against the dollar to its lowest in a year and a half, saying the government was ready to take action against any renewed volatility in the currency market. "We will act swiftly according to our contingency plan and will do whatever is necessary to deal with any excessive volatility in the foreign exchange and other financial markets," Choi Sang-mok said at an urgently convened policy meeting to discuss escalating tensions in the Middle East. He also said the government would extend the fuel excise tax cut for two months until the end of June in an effort to curb inflation amid escalating global geopolitical risks.

Traders and investors are looking to global interest rate cuts and a heated U.S. election to yank global currency markets out of their worst slump in nearly four years. Measures of both historical and expected volatility - how much prices move over a set period of time - have slumped in recent months as the world's biggest central banks stayed put, depriving foreign-exchange traders of access to the divergent movements among regional bond yields they rely on. Deutsche Bank's closely watched implied currency volatility gauge is near a two-year low, not far off its pre-outbreak level.

Wall Street is bracing for possible stress in the currency markets by putting some cash aside ahead of the U.S. tax season, when large tax-related outflows could hurt market liquidity. The tax season culminates on April 15, when individuals file their income tax returns with the U.S. federal government, which typically leads to a drop in financial sector liquidity as individuals withdraw cash from bank deposits and money market funds to pay their taxes. Liquidity, as measured by the Federal Reserve's bank reserves and the Fed's overnight Riposte Ratio (RRP), the favored cash depository for money market funds, is still considered ample, but analysts say the high capital gains from last year's stock market boom could make this year's outflows particularly significant, which could lead to a spike in short-term interest rates.