Uncertainty over tariff policy has led to an increase in demand for currency hedging

Gate.io News bot, according to the Financial Times, the changing tariff policy has pushed exchange rate fluctuations to multi-year highs, and the demand for foreign exchange hedging products has increased significantly in the face of market volatility.

JPMorgan's G7 and Emerging Markets FX Volatility Indices show that recent exchange rate volatility has climbed to levels seen during the March 2023 collapse of Silicon Valley Bank and Credit Suisse. Executives at banks and multinationals noted that uncertainty over tariff policy has spurred demand for foreign exchange hedging products to reduce the impact of sharp exchange rate fluctuations on global business.

Nathan Venkat Swami, head of foreign exchange trading at Citigroup Asia Pacific, said that since the election of Donald Trump as president of the United States in November last year, uncertainty over U.S. trade policy has led to an acceleration in demand for hedging products. He added: "Trading activity in many parts of Asia declined in February due to the Lunar New Year holiday, but trading volumes resumed to rise in March, with strong corporate hedging activity. "