ING: DXY Implied Volatility Drops to 2021 Levels, AI Resilience Supports Currencies
ING strategists note that DXY-weighted short-term implied volatility has fallen to levels last seen in 2021, despite geopolitical tensions and Fed risks, with AI-driven equity resilience supporting currencies and carry trades.
ING strategists Francesco Pesole and Frantisek Taborsky highlight that DXY-weighted short-term implied volatility has declined to levels not seen since 2021. This drop occurs even amid ongoing geopolitical tensions and uncertainties surrounding Federal Reserve policy.
The analysts argue that resilience in equity markets, driven by AI-related optimism, is anchoring currency volatility and supporting carry trades. The low-volatility environment may persist through the summer, barring a major shift in risk sentiment or central bank surprises.
Source: FXStreet Forex News