Emerging-Market Currency Volatility Erases War-Time Spike
- JPMorgan gauge of implied swings at lowest since October 2021
- Peaking of monetary tightening, weaker dollar boost sentiment
Mexican peso banknotes. The peso is the best-performing major currency in the world in 2023.
Photographer: Mauricio Palos/BloombergThis article is for subscribers only.
Options traders have cut their expectations of currency volatility in emerging markets to levels seen before Russia invaded Ukraine in February 2022.
The JPMorgan Emerging Market Volatility Index, an indicator of foreign-exchange swings three months ahead, fell to 8.86% on Friday. That was the first time since the war began that the measure closed below 9%, and marked the lowest level for the gauge since October 2021.