LONDON, Oct 30 Reuters Gauges of expected volatility in currencies jumped on Wednesday as investors braced for the U.S. presidential election, which could result in big changes to economic policy and swings in the dollar.

Singleweek implied volatility in the eurodollar currency pair surged to its highest level since March 2023, when the U.S. was dealing with a minibanking crisis, LSEG data showed. It was set for its biggest oneday rise since 2017.

Implied singleweek sterlingdollar volatility also hit its highest since March. The measures are derived from the prices of options, which investors use to hedge against and bet on moves in the underlying currencies.

Oneweek options contracts now cover the day after the election on Nov. 5, in which Republican former president Donald Trump and Democratic Vice President Kamala Harris are neck and neck in polls.

Investors in recent weeks have taken their cues from betting markets, however, which have shown increased chances of a Trump victory that could lead to higher tariffs and fiscal deficits, both potentially pushing up U.S interest rates and boosting the dollar.

The binary nature of next week39;s contest implies significant FX moves after the event, Barclays strategists, led by Marek Raczko, said in a research note.

The market expects the bulk of the FX reaction to materialise in the week around the election. This can be justified by two things first, the result might still be uncertain on the day after the election,…