The FX markets have had a rough time this year.
It is still unclear why the market is so sensitive to the yuan devaluation.
And it is unclear why it is so volatile.
In a recent interview with CNBC, Bank of America Merrill Lynch senior FX strategist and FX strategist Adam Zirkelbach said, “I don’t know how much to believe about this thing.”
According to the research firm, FX foreign exchange trading volume fell 0.8% last week, which was the first quarterly drop since May 2016.
It was also the biggest one-day decline in a week, at 0.5%.
Analysts at Barclays have been warning for months that FX is vulnerable to devaluation, citing rising market volatility.
FX is also a highly volatile market.
Last year, FX traders lost nearly 1% of their money on average when the yuan was down.
In January 2017, FX market volatility reached 5.6%.
FX volumes dropped 2.6% in January of this year, according to data from Fitch Ratings.
In May 2017, that number was 8.4%.