China rate hikes boost FX volatility

"The rate hike increased the volatility because there has been a perception that this is a prelude to an adjustment to the renminbi foreign exchange regime," said Desmond Supple, head of Asian and global market research at Barclays Capital in Singapore.

Just after the rate hike last Thursday (October 28) the market was "all over the place", said Jesper Dannerboe, FX strategist at CSFB in London, as participants tried to interpret the move. He added, however, that by the end of the day the ma