The global dollar remains strong as volatility increases in the international exchange market

He global dollar continues to rise in a context of increasing volatility in it exchange market, driven by upcoming decisions monetary policy of various central banks—among them, the United States Federal Reserve (Fed)—, economic policies in the main first world countries and, above all, the imminent elections American presidential elections.

He dollar index — which measures the greenback’s performance relative to a basket of six other internationally relevant currencies — rose to a three-month high of 104.63, driven partly by recent strong U.S. data and partly by growing investor expectations of a victory for the former Republican president donald trumpaccording to Reuters.

In parallel, the volatility indicators Expectations in currencies rose on Wednesday as investors prepared for the US presidential election, which could result in big changes in economic policy and swings in the dollar. In fact, the weekly implied volatility of the euro-dollar pair rose to its highest level since March 2023, when the United States was grappling with a mini banking crisis, data from LSEG. It was on track for its biggest one-day increase since 2017.

Also the dollar-pound pair reached its highest volatility since March. The measures are derived from options prices, which investors use to hedge (and bet on) movements in underlying currencies.

One-week options contracts now cover the day after the Nov. 5 election, in which Trump and Democratic Vice President Kamala Harris They are tied in the polls. However, in recent weeks investors have followed the lead of betting markets, which have shown increased chances of a victory for the Republican Party candidate that could lead to higher tariffs and fiscal deficits and, consequently, raise the interest rates Americans and encourage dollar.

“The binary nature of next week’s competition implies important exchange movements after the event,” strategists said in a research note. Barclays, headed by Marek Raczko. “The market expects most of the currency reaction to materialize in the week around the elections. This can be justified by two things: firstly, the result could remain uncertain the day after the elections, and secondly First, the Federal Reserve is scheduled to meet this week,” they added.

The past US elections have sparked an even greater response in the run-up to the event. The week before the 2016 election, which Trump won, one-week implied volatility in the euro reached almost 14%, while one-week implied volatility in the pound sterling was over 13%.

In Uruguay, the dollar rose again

In Uruguay, meanwhile, the dollar rose 0.49% compared to Monday and closed at 41.185 pesos in the interbank price of the Central Bank (BCU), thus ending two consecutive days of decline after the pronounced post-election drop, and returning to the range of 41 pesos.

The North American currency accumulates a monthly depreciation of 1.09% and an annual variation of 5.54%, since its price is 2.16 pesos above that registered after the closing of the last exchange day of last year .