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Jul 14 - 11:55 AM

EUR/USD - Goodbye Parity, Hello A Lot More EUR/USD Volatility

By Jeremy Boulton  —  Jul 14 - 10:05 AM
  • Support around 1.0000 has broken with pair tumbling to 0.9952 EBS

  • Traders and economists are badly prepared for the break nL1N2YU0KI

  • There has been a clear rise in risk aversion

  • Stocks, commodities and higher risk EM FX dropping nL1N2YV1C1

  • Benchmark EUR/USD vol has rocketed to 12.75

  • Highest level of benchmark vol since turmoil of early 2020 (COVID-19)

  • Greater volatility poses great risk for anyone invested in carry trades

  • Drops for high yield EM/commod ccies greater than funders like EUR and JPY

  • One carry trade that may prosper is a EUR/USD short nL1N2YV0DE




Source:
Refinitiv IFR Research/Market Commentary

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