According to ChainCatcher, citing the Financial Times, Trump's repeated tariff policies have pushed exchange rate volatility to a multi-year high, boosting demand for foreign exchange hedging products amid businesses' difficulty in adapting to market fluctuations.
Based on JPMorgan's G7 and emerging market exchange rate volatility index, exchange rate volatility has recently soared to levels seen during the Silicon Valley Bank and Credit Suisse collapses in March 2023. Bank and multinational corporate executives stated that uncertainty surrounding Trump's tariffs has created more demand for foreign exchange hedging products to offset sudden exchange rate fluctuations' impact on global businesses.
Nathan Venkat Swamy, Citigroup's Asia-Pacific head of foreign exchange trading, said that demand for hedging products has accelerated since Trump's election as US president in November last year due to uncertainty in US trade policy. Swamy noted, "Trading activity in many Asian regions slowed down in February due to the Lunar New Year holiday, but trading volume rebounded in March, with strong corporate hedging activities."
