He global dollarfell on Tuesday in the middle of a day marked by volatility and where the voters of USA They went to the polls in elections the result of which will probably decide, at least, the fate of the greenback in the short term.
Overnight, implied volatility options for the euro/dollar soared to the highest level since November 2016, as did those of the pair dollar/mexican pesoin recognition that the latter could be greatly affected by protectionist policies if the Republican donald trump defeats the democratic candidate Kamala Harris.
Despite Trump’s favoritism in the polls, the dollar index —which measures the performance of the greenback in relation to a basket of six other internationally relevant currencies— fell 0.48% to 103.43 and reached 103.37, its lowest level since October 16.
A day marked by volatility
He euro gained 0.48% to $1.0929 and hit $1.09368, its highest since Oct. 11, while the greenback fell 0.44% to $151.46 japanese yen and sank to 151.35, its lowest level since October 23. Meanwhile, the chinese yuan gained 0.13% in offshore trading to 7.103 per dollar, while the mexican peso rose 0.15% to 20.092.
In turn, the bitcoin It advanced 2.76% to $68,928, in a context where industry leaders consider that both candidates will give a boost to the sector.
In this framework, Trump’s so-called operations caused weakness in the euro, the Mexican peso and the Chinese yuan, and all of these regions could face new tariffs under the Republican presidency.
Volatility in these currency pairs increased as the elections approach and the implied volatility One-week rise for euro/dollar options was the highest since March 2023.
Meanwhile, the implied volatility of the Chinese offshore yuan is at a record level, while that of the dollar/Mexican peso is at its highest level since March 2020.
Caution for defining elections
“We may be seeing a bit of a tightening of positions… my sense is that people are cautious,” he told Reuters. Steve Englander, head of G10 global currency research and North American macro strategy at Standard Chartered Bank’s New York branch.
“Right now, the mood seems to be in favor of Trump,” he said, adding: “On the other hand, for most of October and early November, operations with the former president were characterized by a dollar stronger and higher yields.
Trump’s policies on immigration and tariffs stimulate the inflation, while tax cuts and deregulation can boost growth and raise yields treasury bonds long term and the dollar.
A Democratic victory, by contrast, could send the dollar tumbling as traders unwind more bets on Trump and potential investor concern about the economic impact of higher taxes and tighter business regulations.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
