Currency traders are hastily implementing hedges to protect against potential large FX market swings as election results begin to emerge.
Options contracts focused on volatility for the euro and Mexican peso—two currencies at risk of significant tariffs if Donald Trump wins—have surged to levels not seen since his 2016 presidential victory.
In China, where Trump has vowed to impose 60% tariffs, overnight volatility contracts on the yuan are nearing their highest levels since at least 2012.
Trump and Democrat Kamala Harris are virtually neck-and-neck in opinion polls, with the possibility that a clear winner may not be known for days, weeks, or even months after voting concludes.
Analysts believe that Trump’s proposals to reduce immigration, cut taxes, and introduce hefty trade tariffs would create global disruption, likely boosting inflation and the dollar.
Harris, meanwhile, is generally viewed as a more stable choice by markets, though economists suggest her domestic spending plans may also contribute to rising inflation.
Follow us on our social media platforms here: Twitter WHATSAPP CHANNEL FACEBOOK PAGE
