The volatility of emerging currencies reaches its maximum value in one year

Operators of emerging-market currencies continue with the nerves of tipping, while journeymen who trade currencies from developed countries face a boring season.

The implied volatility in emerging market currencies has increased and is approaching its highest level for more than a year, according to an indicator from JPMorgan Chase & Co. based on stock options. term of three months. At the same time, a similar measure of volatility in the currencies of the developed countries continues more than one percentage point below its five-year average. The divergence between the two indicators has reached its highest level since 2011.

The currencies of the G7 countries register a relative calm, in the middle of the decision of the central banks of Europe in Japan maintain an expansive monetary policy . But emerging markets have been facing a damaging mix of fears and geopolitical problems in specific countries in recent months. The threat of a trade war between the United States and China has reduced the risk appetite, affecting investors who have accumulated emerging market badets in recent years in search of returns. The general strengthening of the dollar is also a threat to some developing countries.

The Argentine peso continues to be the worst-performing currency of the group of major currencies.

Emerging markets are facing a scenario of serious change. Alejandro Cuadrado, World Coins Chief of Banco Bilbao Vizcaya Argentaria SA based in New York

The Turkish Lira faced renewed pressure last week after US President Donald Trump threatened to Impose "general sanctions" on the country; and the central bank of Ankara hit the investors by maintaining its interest rate. The Argentine peso continues to be the worst-performing currency of the major currency group, after the country has secured a 50,000 million US dollar credit line from the International Monetary Fund to support the weakening of the currency. # 39; s economy.

The Chinese a largely controlled currency, saw a rise in the price bands expected . Traders are trying to determine whether a tougher trade war will push the central bank to let the currency continue to fall, after falling to its lowest level in more than a year this month.

The growing turbulence is particularly noticeable given the calm that prevailed at the beginning of the year, according to Lisa Chua, head of currency at Man GLG in New York. "The market is too accustomed to an abnormal period of low volatility, generated by quantitative monetary stimulants around the world," Chua said. "Even a small wave can look like a tsunami for those who have become very satisfied with a calm sea."

E The JPMorgan Emerging Markets Volatility Index fell to 7.5% in January. Up to 10.14% this month, its highest record since February 2017 and slightly above its five-year average of 9.36 . In contrast, the G7 currency indicator fell to 6.98% in early July.