The Impact of Equity Recovery on USD Volatility

Tuesday, 23 July 2024, 10:54

The forex market remains stable, largely unaffected by US political developments, with low volatility dominating the landscape. As investors consider returning to carry trades, caution is advised due to risks associated with the Japanese Yen and Mexican Peso. ING’s FX strategist, Chris Turner, offers insights into this cautious optimism within the currency markets, signaling potential opportunities amid market stability.

Fxstreet — The Impact of Equity Recovery on USD Volatility

Overview

The foreign exchange market remains subdued, with volatility at historically low levels, largely indifferent to the events within US politics.

Key Observations

Low volatility is current across FX markets.
The potential to rotate back into carry trades persists.
There are specific risks linked to the Japanese Yen and Mexican Peso.
Insights from ING’s FX strategist, Chris Turner, highlight this cautious market sentiment.

Conclusion

Despite low volatility, traders should approach carry trades with caution, recognizing inherent risks in currency choices.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.