Trump Tariff U-Turns Have FX Traders Cutting Bets on Big Swings
With more than 75% of Canadian exports bound for the US, Trump’s threats to impose 25% tariffs on Canadian goods led to a wild ride for the loonie.
Photographer: Christopher Katsarov Luna/BloombergTraders who’d bet on sharp swings in the $7.5 trillion-a-day foreign-exchange market surrounding Donald Trump’s last two tariff deadlines are taking a new approach as the president vows an April 2 trade reckoning.
Expectations for volatility in options tied to tariff-sensitive currencies — such as the Canadian dollar and euro — have actually been easing over the past two weeks, according to data compiled by Bloomberg. Such a subdued outlook stands in stark contrast to the spike in FX volatility measures seen earlier this year around the US president’s previously threatened levy dates.