Currency volatility spikes after Trump wins presidency

6 November 2024

Market update:

• The US dollar has strengthened by up to 1.5% against the pound this morning, as markets react to expectations of a ‘Trump trade’ effect. Markets are pricing in the likelihood of aggressive US tariffs keeping inflation higher for longer, which could sustain elevated US interest rates and drive demand for the dollar.
• Election-related volatility has pushed GBP to EUR near two-year highs, with the euro under pressure due to potential US tariffs and recession concerns in Germany.
• More market volatility is likely in the next 24 hours in the wake of the US election and tomorrow’s Bank of England and US Federal Reserve meetings, where both are expected to cut rates by 0.25%.

Please contact your account manager on +44 (0) 203 384 7280 to discuss how a Trump presidency could impact your currency exposures in the coming period. We’re here to help you manage risk while optimising your execution strategy.