Currency volatility has remained so low that traders are treating it as the new normal rather than a passing phase. This subdued backdrop was a major theme at an annual industry gathering in Amsterdam, where investors noted that sharp changes in bonds, oil, and geopolitics struggle to generate lasting currency swings.

Harish Neelakandan, co-chief investment officer at Alpha Engine Global Investment Solutions, described a secular downtrend in currency volatility. In the $9.6 trillion-a-day foreign-exchange market, this lack of movement is a perennial problem for traders aiming to thrive on big swings. However, Thomas Carreau, a currency portfolio manager at CN Investment Division, noted that carry trades continue to perform well in this calmer environment. He prefers structuring them to be dollar neutral, citing that US President’s Donald Trump’s social media posts can still cause small day-to-day swings.

The prolonged calm poses risks, as lower volatility forces traders to put on larger positions to generate returns. Harel Jacobson, associate portfolio manager at Capstone Investment Advisors, warned that this leaves portfolios more exposed when rare big moves hit. Meanwhile, companies are adapting; Georgios Velissariou, head of financial risk management at Hitachi Energy’s group treasury, said lower volatility had made options a more attractive way to hedge certain currency exposures. Karel Sanders, head of FX product management at Rand Merchant Bank, said dollar-rand volatility at a two-decade low is forcing the South African lender to reconsider its options business.