Analyst: Trump's inauguration will cause severe fluctuations in the foreign exchange market

BlockBeats News: On November 22nd, foreign exchange traders bet that Trump's policy agenda will cause significant volatility in the $7.5 trillion daily trading volume of the foreign exchange market. Although it is currently unclear how quickly Trump will implement policies that could have a significant impact on currencies such as the euro, such as trade tariffs, investors generally believe that unpredictability will be a major feature of Trump's presidency. In addition, there are unknown factors, namely how countries will respond to Trump's measures and what impact these countermeasures will have on the market. Dominic Bunning, Head of G-10 Strategy at Nomura Securities, stated, "It is expected that Trump's potential policies will create greater macroeconomic divergence, which will lead to greater foreign exchange volatility." The market's expectation of a stronger US dollar under Trump also supports the argument that hedging costs will increase, as the correlation between the US dollar and volatility is strongest when demand for the dollar is high. (Golden Ten)