FX Traders Hunting for Certainty Pile Into Bets on Volatility
- Shifting market narratives result in choppy spot price action
- Euro and yen volatility hits multi-month highs across tenors
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When in doubt, buy volatility.
The old adage is holding strong, even as traders struggle to identify which currencies might offer the best shelter in times of upheaval. Bets that there will be price swings may look appealing, in particular as implied volatility in foreign-exchange hasn’t reacted with quite the same violence this week as similar measures for stock and bond markets.