EUR/USD volatility jumps to one-year high, 10bps June ECB rate cut priced in

The euro-dollar one-month implied volatility jumped to one-year high at 6.6%, thanks to the coronavirus outbreak that has prompted big moves across the fx board while heightening the global recessionary fears, as cited by Reuters.

It’s worth noting that Euro-dollar volatility, which fell to a record low just last month below 4%, surged to 6.75%, the highest since last July, having ended last week around 4.8%.

Meanwhile, Eurozone money markets now fully price a 10-bps rate cut at the European Central Bank’s (ECB) June meeting, per ECBWATCH.

According to CME's FedWatch tool, markets see a 99.3% chance the Fed will cut interest rates by 25 basis points at its March 18^th monetary policy meeting.

EUR/USD refreshes three-week high

The EUR/USD pair trades close to a new three-week high printed at 1.1048, as the US dollar remains heavily dumped across the board. A March Fed rate cut is now fully priced-in by the markets.