Analysis: Low volatility in the FX market may persist until early September, potentially prompting markets to digest rate hike expectations

Odaily News According to a report by Morgan Stanley analysts, low volatility in the G10 foreign exchange market is expected to persist through late August and early September. Data from now until the September Federal Reserve meeting should align with expectations that the Fed will hold interest rates steady this year, which will prompt markets to gradually digest rate hike expectations. "Given the long-term weak correlation between Fed policy pricing and FX volatility, we expect FX volatility to face downward pressure." In addition, ahead of the U.S. midterm elections, Middle East risks may continue to be digested by the market, while August has historically been a relatively calm period for markets. (Jin Shi)