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    Multi-asset chart of the week

    Multi Asset chart of the week

    19 August 2025 Multi-asset
    Week to 22 August 2025

    Emerging market currency implied volatility has fallen below developed markets

    Stephanie Chan, CFA, Portfolio Manager, said: “We are seeing Emerging Market FX implied volatility fall below G10 developed markets, and it is now one of the widest negative differences between the two since 2018. Both EM and DM FX implied volatility have been trending down since Liberation Day, and the US dollar has been weakening since the start of the year. Emerging market currencies are benefiting from both push factors away from the US dollar and pull factors towards the EM economies. The Fed is expected to continue its rate cut cycle as growth data weakens in the US. Some EM currencies offer higher carry, have space for fiscal and monetary expansion, and have positive net international investment positions.”

    Chart of the week 02072025.jpg

    Source: Bloomberg and Insight Investment as at 15 August 2025

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