FX volatility rose briefly at the start of the Corona crisis and then normalized quickly. Central banks will try to keep it that way and market participants are unlikely to bet against them. Yet, currency trends can change without a rise in volatility, while central banks may not succeed in keeping everything stable.
Economy and Interest Rates
Global economic activity continued to recover in June after turning in May. North Asia continues to lead the recovery followed by Europe and the USA, while other Emerging Markets, notably in South America, are lagging behind.
Exchange rates have been more range-bound over the last months. Classic safe-haven currencies performed better but the USD failed to regain the lost ground versus the EUR, supporting the view that a trend change is emerging.
Going into more detail: Based on our proprietary analytical framework to take scalable exchange rate positions we are taking a close look on individual currency pairs.