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Will Currency Markets Repeat Strong Volatility on Thanksgiving?
By DailyFX Updates | November 21, 2007
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Holiday-shortened trading weeks have historically brought narrow trading ranges to the forex market, but recent volatility clearly shows that traders remain willing to force major moves ahead of the typically illiquid Thanksgiving holiday. Given that virtually all US financial markets will be closed on Thursday, November 22nd, there will be significantly less forex interest from major market makers and speculators. Yet it is exactly this market illiquidity that allowed speculators to drive the US dollar significantly lower through last year’s Thanksgiving holidays, and it remains relatively unclear whether or not we will see a repeat in the days ahead. The dollar has already posted its single-largest daily decline in over a year through Tuesday’s trading, and it seems that volatility may continue through the week ahead. Yet a 10-year study of average daily ranges over Thanksgiving clearly suggests that we may see progressively narrower ranges through Thanksgiving.
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