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Global currency trends through the financial crisis

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  • Zoe Wallis

    (Reserve Bank of New Zealand)

Abstract

In this article, we examine trends in the global and NZD foreign exchange (FX) markets over the recent financial crisis period from 2007 to 2010, identifying key changes in the nature of FX trading. These trends are examined using the most recent Bank for International Settlements (BIS) triennial survey as well as other data sources and market intelligence. The survey shows that, overall, the volume of global FX turnover has increased over the last three years. Demand for safehaven currencies such as the US dollar and Japanese yen have increased through the crisis. The NZD’s share of global turnover has decreased in an environment of increased risk aversion and volatility, and investor interest in trading the NZD has waned. Demand for carry trades, particularly in NZD, has fallen in an environment of increased volatility.

Suggested Citation

  • Zoe Wallis, 2010. "Global currency trends through the financial crisis," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 73, pages 28-37, December.
    • Handle: RePEc:nzb:nzbbul:dec2010:4
    as

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    File URL: http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/2010/2010dec73-4Wallis.pdf
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    References listed on IDEAS

    as
    1. Enzo Cassino & Zoe Wallis, 2010. "The New Zealand dollar through the global financial crisis," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 73, pages 20-30, September.
    2. Lauren Rosborough, 2001. "Trends in foreign exchange trading," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 64, December.
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