When Russia launched its unprovoked invasion of Ukraine on February 24, it was one of those rare moments when everything just stops. The shock put European markets into a tailspin, as the world mulled the implications on everything from oil and the pace of interest rate rises, to whether it was legal to own Russian bonds.
There were countless knock-on effects, and the FX markets had their fair share. Electronic platforms had to quickly decide whether to suspend trading in the spot currency or limit it to offshore clients only. Almost overnight, a market that was doing $1 billion a day against dollars and euros dwindled.
The return of interest rates rises was the other big event, with a hawkish Federal Reserve fuelling the welcome return of volatility for traders. As the dollar surged, a weakening yen and renminbi proved attractive options plays for hedge funds as the year went on.
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