Currencies
Traders Price In Trump Win by Piling Into Currency Hedges
- Implied volatility in euro-dollar jumps after Iowa caucuses
- Market gauge of positioning shifts in favor of the US dollar
Donald Trump speaks at a campaign event in Las Vegas on Jan. 27.
Photographer: David Becker/Getty ImagesThis article is for subscribers only.
Currency traders are increasingly hedging against any turmoil stirred by policies expected under a potential Donald Trump presidency.
In the options market, demand for insurance against swings in the euro over the coming year has been rising ever since Trump won the Republican nomination in Iowa earlier this month. At the same time, a barometer of market positioning and sentiment has jumped in favor of the dollar, the world’s preferred safe-haven currency.