Currencies Are Ready to Swing as Seasonality, Policy Join Forces
- Hedging costs rise in August on liquidity, end of summer lull
- Hedge funds add long gamma exposure into central bank meetings
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Trading in the calm currency market may be about to get rough.
Seasonality tends to push up volatility in August amid reduced liquidity. Traders are already seeking protection ahead of key central bank gatherings in September, driving currency hedging costs sharply higher.