Emerging Currency Traders Are Being Kept on Their Toes
- Gap between emerging-, developed-market FX volatility widened
- Turkey, Argentina and China keeping traders’ attention
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Emerging-market foreign-exchange traders are being kept on their toes even as their counterparts dealing in developed currencies might be struggling to stay awake amid the lull of the northern summer.
Implied volatility on emerging-market currencies has surged and is close to its highest level in over a year, according to a JPMorgan Chase & Co. gauge based on three-month at-the-money forward options. At the same time, a similar measure of volatility for major developed-nation currencies remains more than a percentage point below its five-year average. This month saw the widest divergence between the two measures since 2011.