Summary
This guide provides an analysis of the global trends and events influencing foreign exchange (FX) volatility as of May 2024. It outlines the recent return of financial market volatility, particularly noted in April, driven by geopolitical tensions and concerns regarding sustained high interest rates in the US. The document details how the VIX index rose above 20.0, indicating increased market uncertainty. It also discusses the performance of various currency pairs, including the US dollar, euro, and British pound, highlighting significant fluctuations and the impact of economic indicators such as inflation and employment data. The guide emphasizes the importance of understanding these dynamics for small and medium enterprises (SMEs) and corporations engaged in cross-border trade, aiming to aid in the development of informed international trade and payment strategies. Additionally, it notes the divergence in central bank policies and its implications for currency values, particularly in the context of rising global rates and economic data from the US and Europe.
