U.S. Election, Brexit and Other Risks Facing the Dollar

The video discusses the impact of political risk on currency markets, particularly focusing on the US election and its potential effects on the dollar's volatility. It explores FX options and market volatility, considering the euro, emerging markets, and sterling, especially in light of the upcoming EU referendum. The discussion also touches on global political events, such as those in Brazil and Japan, and their impact on currencies. Finally, it covers market predictions and warnings from the Federal Reserve regarding potential rate hikes.

How does political risk generally affect currency markets?

• It usually has a negative impact.

• It tends to stabilize currency values.

• It has no effect on currency markets.

• It always leads to a rise in currency values.

Which currency was not initially considered for FX options during the discussed period?

• Emerging market currencies

• Yen

• Sterling

• Euro

What upcoming event was expected to influence the value of sterling?

• U.S. Presidential Election

• EU Referendum

• Brazilian Election

• Japanese Economic Summit

Why might investors be cautious about entering the Brazilian market?

• Due to a strong currency

• Due to high liquidity

• Because of stable economic conditions

• Because of political uncertainty

What is the market's perception of a potential rate hike by the Federal Reserve in June?

• It is highly anticipated.

• It is considered unlikely.

• It is already priced in.

• It is expected to have no impact.