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📝 Rising Terminal Rate Expectations Driving Volatility: BofA FX Strategy

The Fed tightening cycle is a key driver for higher FX vols, and we continue to see rising terminal rate expectations as the key driver to keep FX vols supported in the near term.

While short-term shocks could keep the USD strength sustained in the near term, most of the secular USD gain has been realized, in our view.

**JPM FX Vol Index Last at 11.32%, Sept. High 11.65%

- BofA FX Strategy



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