Currency Volatility Poised to Surge as U.S. Election, Fed Loom
- Bigger price swings will follow period of calm, UBS says
- Foreign-exchange turbulence fades from a post-Brexit peak
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Volatility in the $5.1-trillion-a-day foreign-exchange market is down, but not out, according to UBS AG.
Currency swings will increase later this year as investors weigh the potential outcome of the U.S. presidential election and the likelihood of a Federal Reserve year-end interest-rate increase. The predicted volatility resurgence follows a period of calm that started in July, after traders absorbed the initial shock of the U.K.’s Brexit vote. A JPMorgan Chase & Co. gauge of currency volatility fell to a two-week low this week.