Euro, peso volatility hits highest since 2016 US election
Oneweek, onemonth volatility spikes across the board
Price action to pick up as results emerge
LONDON, Nov 5 Reuters Currency traders rushed to hedge against big overnight price movements that might ensue as the results of the 2024 U.S. election trickle out, pushing options volatility for the euro and Mexican peso to the highest since the 2016 vote.
The euro and the peso are seen as among the most sensitive to the outcome of the election, which has been too close to call for weeks between Democratic Vice President Kamala Harris and Republican former President Donald Trump.
Harris and Trump remain virtually tied in opinion polls and the winner might not be known for days after voting ends.
Analysts believe Trump39;s policies on immigration, tax cuts and tariffs would put upward pressure on inflation, and drive up bond yields and the dollar, while Harris is seen as the continuity candidate.
Euro overnight implied volatility, which reflects demand for protection against very nearterm price moves, surged to 26.4 , the highest since Nov. 9, 2016, a day after the U.S. election that year that Trump won, confounding previous polls.
Overnight volatility on the Mexican peso soared above 87, its highest since the day of the 2016 vote on Nov. 8.
Todays election is closer than a coin toss, highlighting the uncertainty surrounding the outcome, Monex Europe strategists said in a daily note.
That fact is likely to keep…