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Volatility is picking up pace in the markets – Scotiabank

FXStreet (Edinburgh) - Camilla Sutton, Chief FX Strategist at Scotiabank, remarks market volatility has been building up recently.

Key Quotes

“Volatility is rising across several asset classes, including currencies”.

“The market is in the midst of a USD bull rally; however the fundamental change is also driving higher volatility and uncertainty”.

“The impact on currencies has been multi-fold; however an important one has been an increase in the daily high to low range”.

“For USDCAD this has meant that the average daily range has jumped up from its 6‐month average of 56 points and in the last two months there have been eight‐sessions with a daily range wider than 100 (see chart) in the last two months, versus only one in the previousfour months”.

“It is a similar story for USDJPY where the average daily six‐month has jumped up from 51 points and in the last two months there has been eight‐sessions of above 100 point ranges; versus only one in the previous four months”.

“We see this as a warning that as volatility rises, there are increasing opportunities for market participants; but hedge programs need to be approached with diligence”.

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