Posted by forex at 9:42 AM
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1. Log in to Bloomberg on either a dedicated terminal or on a PC.
2. Click on the 'Currency' function button at the top of the screen.
3. Type in the letters 'WVOL' and hit enter. The screen that appears is the FX Implied Volatility Matrix.
4. Select the base currency to be analyzed in the upper-left-hand corner using the drop-down menu. For example, USD means the U.S. dollar.
5. Choose the currency that you want to look at down the left-hand side of the screen. For example, CAD means the Canadian dollar.
6. Move across the row you have selected to find the volatilities, which are based on the amount of time going forward. For example, '1M' means one month forward, and '2M' means two months forward.
7. Convert the decimal number shown to a percentage, and that is the volatility of the U.S. dollar vs. the Canadian dollar for that time period. For example, if the number on the screen is 14.225 in the 1M column, then there is a 14 percent volatility of price change over a month for the U.S. dollar vs. the Canadian dollar.