Analyst: Trump's presidency will cause drastic Fluctuation in the forex market

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On November 22nd, forex traders bet that Trump's policy agenda will cause significant fluctuations in the $7.5 trillion forex market. Although it is still unclear how quickly Trump will implement policies that could have a major impact on currencies such as the euro, such as trade tariffs, investors generally believe that unpredictability will be a major feature of Trump's term. In addition, there are unknown factors such as how countries will respond to Trump's measures and the impact these countermeasures will have on the market. Dominic Bunning, head of G-10 strategy at Nomura Securities, said, 'It is expected that Trump's potential policies will create greater macroeconomic divergence, which will lead to greater forex fluctuations.' The market's expectations of a stronger dollar under Trump also support the argument for higher hedging costs, as the correlation between the dollar and fluctuations is strongest when there is high demand for the dollar. (Jinshi)

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