TechFlow news, on November 22, foreign exchange traders are betting that Trump's policy agenda will trigger significant volatility in the $7.5 trillion daily forex market. While it remains unclear how quickly Trump will implement policies—such as trade tariffs—that could substantially impact currencies like the euro, investors broadly agree that unpredictability will be a defining feature of his term. Moreover, there is uncertainty about how countries will respond to Trump’s measures and what effects these countermeasures might have on markets. Dominic Bunning, Head of G-10 Strategy at Nomura Securities, said: "We expect Trump’s potential policies to create wider macroeconomic divergence, leading to greater currency volatility." Market expectations of a stronger dollar under Trump also support the argument for higher hedging costs, as the correlation between the dollar and volatility is strongest when demand for the dollar is high. (Jinshi)
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