Currency ranges tighten as complacency sets in
Good morning. Currency markets have slipped back into extremely tight ranges as geopolitical fears recede and incoming data point to “Goldilocks” conditions across much of the advanced world. Realised volatility across asset classes remains exceptionally low, and implied volatility measures show investors are unworried about shocks: the VIX has fallen well below traditional fear thresholds, the MOVE* Treasury index is at its lowest since 2021, and average six-month implied volatility in the major foreign exchange pairs has dropped to levels not seen since early 2024. The British pound is struggling to make headway, even after new data showed the economy...