Euro Volatility Jump Lifts Cost to Hedge French Vote Risk: Chart

Mounting euro-area political risks centered on France are driving up the cost of hedging against fluctuations in the common currency. The implied volatility on three-month euro-dollar options, whose tenor now captures the final round of French presidential elections due May 7, surged 100 basis points Wednesday to 10.25 percent. That’s the biggest increase since mid-December and the highest level in more than a month.

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