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Economic Viewpoint

Is Higher Volatility in Emerging Country Currencies Something to Worry About?

July 4, 2018
François Dupuis, Vice-President and Chief Economist • Hendrix Vachon, Senior Economist

Volatility on the foreign exchange market has been increasing since mid-April. Greater monetary tightening is now expected in the United States, driving up the U.S. dollar. Currency volatility is also a reflection of a stronger aversion to risk, fuelled recently by the spike in oil prices, the resurgence in financial tensions in the euro zone and the escalation of protectionist measures.