Trade War Kills FX Volatility

The video discusses the muted options volumes and market reactions amidst trade tensions, highlighting the strength of the dollar. Traders face challenges in predicting currency trends due to these tensions and the potential for a currency war. The focus has shifted to emerging market and commodity currencies, with the Australian dollar serving as a proxy for trade war impacts. Despite low volatility, forecasting remains difficult, with banks hesitant to make predictions.

Why is the Australian dollar considered a good proxy for the trade war?

What is the current sentiment among strategists regarding currency forecasts?