FX dealers expect volatility upswing

Dealers and analysts said they expect volatility to return over the coming months as a result of the return of US firms hedging in the forex markets, yen volatility spilling into euro/dollar, potential interest rate hikes and more mergers and acquisitions activity.

"Q2 will be a lot busier," said Eric Nickerson, head of currency strategy at Bank of America in New York.

He said that with economic uncertainty and the collapse of US energy giant Enron, US corporates have been taking an unusuall

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