Before the release of the U.S. August non-farm payrolls, currency hedging costs rise as traders prepare for increased volatility in the foreign exchange market

After experiencing a calm summer, the hedging costs in the currency market have risen again, as traders position themselves for potential price fluctuations triggered by the upcoming U.S. employment report. The one-day implied volatility of the euro against the dollar has risen to its highest level since June, reflecting the significance of the non-farm payroll data. If the employment data is weak, it may fuel market bets on a Federal Reserve interest rate cut, pushing the dollar lower. At the same time, the hedging demand for the pound is also increasing, with the relative hedging costs for three-month terms reaching their highest level since January