U.S. Rate Decision Prompts Vol Spike

23 Mar 2007

The Federal Reserve decision to leave U.S. rates unchanged at 5.25% Wednesday prompted an uptick in implied volatility on the euro versus the U.S. dollar.

The Federal Reserve decision to leave U.S. rates unchanged at 5.25% Wednesday prompted an uptick in implied volatility on the euro versus the U.S. dollar. Investors interpreted the decision as a sign the dollar will weaken against the euro and so they bought up euro calls. One month ...

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