While the decline in stock market volatility this year has been well documented, the decline in currency volatility has gotten less attention. The decline in the dollar's volatility, however, has been nearly as dramatic as the decline in equity volatility. The chart below shows the average daily percentage change (up or down) of the US Dollar Index over a rolling 50-day period. Back in December of last year, the Dollar was averaging a daily gain or loss of 0.92%. Since then, the average daily change has more than halved to 0.43%, although it is still higher than the 0.30% average since 1973. Unlike most other assets where volatility decreases as prices rise, in the currency market, lower volatility has coincided with declining values.
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