Euro-dollar volatility jumps to one-year high amid big FX moves


LONDON: Market gauges of euro-dollar one-month implied volatility jumped on Friday to their highest in over a year at 6.6% as the intensifying coronavirus outbreak fuelled big currency moves and recession fears.
The Japanese yen, appeared to have regained its safe-haven status after last week’s brief wobble, rising to a 3-1/2-week high of 108.79 versus the dollar.
The euro was last up 0.3% at $1.1028, a three-week high. Euro-dollar volatility, which fell to a record low just last month below 4%, surged to 6.6%, the highest since last January, having ended last week around 4.8%.
The greenback had strengthened recently but has since handed back those gains as money markets moved to price three 25 basis-point Fed cuts by mid-year, starting with one later this month. As recently as a week ago, markets had seen just a 9% chance of a cut.