FX volatility jumps


    LONDON- Gauges for implied currency swings in the $6.6 trillion a day foreign exchange markets jumped to their highest levels in nearly seven months on Wednesday as traders anticipated more volatility before the outcome of the US elections next week.

    Contracts for euro and Japanese yen oneweek implied volatility versus the US dollar expiring in a week climbed to their highest levels since early April before the US Presidential elections on Nov. 3.

    While general currency market volatility remains elevated this week as Europe experiences a surge in coronavirus cases, the spurt in short-end volatility indicators indicate concerns around the US election outcome, even though odds have stabilised this week.

    In equity markets, the widely watched VIX index held below a June 2020 high.