Given FX market movements across the world, it was little surprise that the latest survey from the Bank of England’s foreign exchange joint standing committee, published at the end of July, reported increased turnover across swaps, outright and non-deliverable forwards. All three reached record highs, the survey found.
The rising cost of funding in dollars and more recently in euros has ramifications for the rest of the world and explains the record demand for instruments that provide hedging in FX and rates markets.
As long as stagflation fears persist, we would expect FX volatility to remain high
George Saravelos, Deutsche Bank
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