Pioneer Sees ‘Crazy Day’ Bringing Aftershocks to Currencies (1)
2015-08-26 08:22:57.135 GMT
(Updates prices in fourth paragraph.)
By David Goodman
(Bloomberg) -- Even as currency markets stabilized after
dramatic moves on Aug. 24, Andreas Koenig was bracing for
aftershocks.
“It was probably the most crazy day since Lehman,”
Koenig, the Dublin-based head of foreign exchange, Europe, for
Pioneer Investments, said in an interview. “Normally you expect
after such a move there is more to come -- it doesn’t end after
one day.”
Pioneer, which manages about $242 billion, was positioned
to benefit from an appreciating yen on Aug. 24, resulting in a
“good day.” Even so, mindful of further moves, Koenig said he
only took a profit on part of that position as Japan’s currency
jumped 3.1 percent versus the dollar, the most since the “flash
crash” in May 2010.
The yen pared a decline of as much as 1.7 percent on
Tuesday to close down 0.4 percent. It was 0.6 percent weaker at
119.54 as of 9:19 a.m. Wednesday. The Swiss franc was 0.3
percent lower on Wednesday, adding to a 1 percent drop the
previous day.
Currency markets were roiled Monday by a selloff in global
equities that erased $2.7 trillion in market capitalization in
just one day. That also created opportunities for currency
investors who can benefit from increased priced swings, Koenig
said.
JPMorgan Chase & Co.’s index of volatility in Group-of-
Seven currencies jumped 1.1 percentage point on Aug. 24, the
most since Jan. 15, when the Swiss National Bank removed its peg
on the franc.
“Sometimes people complain about when panic is there and
there’s a lot of volatility, but as we are trading exclusively
currencies it’s actually not a bad time for us,” Koenig said.
“You have to take a step back and just ask where is an
opportunity to make money out of it.”
For Related News and Information:
Top Stories: TOP<GO>
Top currency stories: TOP FX <GO>
Top bond stories: TOP BON <GO>
Financial-conditions monitor: FCON <GO>
Yield Curves: CRVF <GO>
To contact the reporter on this story:
David Goodman in London at +44-20-3525-0717 or
dgoodman28@bloomberg.net
To contact the editors responsible for this story:
Paul Dobson at +44-20-3525-2041 or
pdobson2@bloomberg.net
Todd White, Lukanyo Mnyanda
2015-08-26 08:22:57.135 GMT
(Updates prices in fourth paragraph.)
By David Goodman
(Bloomberg) -- Even as currency markets stabilized after
dramatic moves on Aug. 24, Andreas Koenig was bracing for
aftershocks.
“It was probably the most crazy day since Lehman,”
Koenig, the Dublin-based head of foreign exchange, Europe, for
Pioneer Investments, said in an interview. “Normally you expect
after such a move there is more to come -- it doesn’t end after
one day.”
Pioneer, which manages about $242 billion, was positioned
to benefit from an appreciating yen on Aug. 24, resulting in a
“good day.” Even so, mindful of further moves, Koenig said he
only took a profit on part of that position as Japan’s currency
jumped 3.1 percent versus the dollar, the most since the “flash
crash” in May 2010.
The yen pared a decline of as much as 1.7 percent on
Tuesday to close down 0.4 percent. It was 0.6 percent weaker at
119.54 as of 9:19 a.m. Wednesday. The Swiss franc was 0.3
percent lower on Wednesday, adding to a 1 percent drop the
previous day.
Currency markets were roiled Monday by a selloff in global
equities that erased $2.7 trillion in market capitalization in
just one day. That also created opportunities for currency
investors who can benefit from increased priced swings, Koenig
said.
JPMorgan Chase & Co.’s index of volatility in Group-of-
Seven currencies jumped 1.1 percentage point on Aug. 24, the
most since Jan. 15, when the Swiss National Bank removed its peg
on the franc.
“Sometimes people complain about when panic is there and
there’s a lot of volatility, but as we are trading exclusively
currencies it’s actually not a bad time for us,” Koenig said.
“You have to take a step back and just ask where is an
opportunity to make money out of it.”
For Related News and Information:
Top Stories: TOP<GO>
Top currency stories: TOP FX <GO>
Top bond stories: TOP BON <GO>
Financial-conditions monitor: FCON <GO>
Yield Curves: CRVF <GO>
To contact the reporter on this story:
David Goodman in London at +44-20-3525-0717 or
dgoodman28@bloomberg.net
To contact the editors responsible for this story:
Paul Dobson at +44-20-3525-2041 or
pdobson2@bloomberg.net
Todd White, Lukanyo Mnyanda