August 10, 2018 / 1:22 PM / 5 days ago

Currency volatility gauges ignite as Turkish lira turmoil spreads

(Reuters) - Currency volatility gauges erupted across FX markets on Friday, as a 12 percent crash in Turkey’s lira triggered a global wave of turbulence.

People change money at a currency exchange office in Istanbul, Turkey August 10, 2018. REUTERS/Murad Sezer

Lira one-week implied volatility spiked to a record high of over 60 while the one and three-month equivalents both surged to their highest since global financial meltdown of 2008.

There was a wider market spillover too, in other sensitive emerging market currencies such as the South African rand and Russian rouble most prominently, but also among many major FX pairs market.

Euro-dollar and euro-yen one-week, one-month and three-month implied volatility levels all jumped to their highest in six weeks, while sterling-dollar 3 month levels hit a five-month high as Brexit nerves compounded the problem.

Reporting by Marc Jones and Tom Finn; editing by Helen Reid

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