FX Volatility Has Been Controlled, Says BMO's Gallo

The video discusses the controlled nature of FX volatility compared to other asset classes, influenced by strong global growth and increasing US twin deficits, leading to a weak dollar theme. It also covers the volatility of the yield curve and its comparison to the VIX in equity markets. The dynamics between the yen and dollar are analyzed, highlighting their roles as safe havens during market uncertainty, with a forecast for the dollar-yen exchange rate.

What has been the primary reason for the recent weakening of the US dollar?

• Decreasing US fiscal deficit

• Strong global growth

• Increased US interest rates

• Stable FX volatility

How does the virtuous circle from the last decade relate to the current dollar situation?

• It has no impact on current market conditions.

• It remains intact despite recent market changes.

• It has led to a stronger dollar.

• It has been disrupted by recent equity routes.

What does the VIX represent in the context of the equity market?

• The volatility of the yield curve

• The volatility of the equity market

• The performance of the yen

• The strength of the US dollar

What has been the recent trend in yen crosses?

• Strengthening of the yen

• Weakening of the yen

• Increased volatility in yen

• Stability in yen value

What is the expected trend for Dollar Yen in the next 12 months?

• It will strengthen significantly.

• It will weaken to 104.

• It will remain stable.

• It will fluctuate unpredictably.