The squeeze on spot FX
Market-makers feel squeeze on profits as spreads continue to tighten
The global investigation into alleged foreign exchange market manipulation might have occupied the attention of the market over the past six months, but with volatility hitting some of its lowest points in major currency pairs this year, FX liquidity providers have been facing an arguably more significant problem.
Historically low market volatility has squeezed bid/offer spreads significantly, with some pairs' spreads so tight that on occasions prices have inverted, according to the head of FX
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