Expect More FX Volatility: Short-Term Movements Ahead

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Throughout 2023 FX volatility has been trending lower amid range bound markets. Volatility reached the lowest level earlier this month and there has been a small rally.
Across all currencies the term structure of volatility has become more inverted (short dates have rallied more than longer dates). The option prices seen in the market imply more movement is expected over the short-term.

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