FX Traders Aren’t Worried About Eastern Europe Political Turmoil

Political risk may be alive and kicking, but investors couldn’t seem to care less. While Eastern Europe has seen two new premiers in little more than a month and Poland is being threatened with relegation to the EU’s sin-bin for eroding the rule of law, the region’s currencies are soaring. Implied volatilities on the zloty, the forint and the koruna are all sliding, a sign that traders think that political risk isn’t a headache for the exchange rates.

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