Market Volatility Surges Amid Upcoming US Presidential Election

Currency markets experienced significant volatility ahead of a tight U.S. presidential election, with rising odds for Kamala Harris affecting previous market expectations. The euro and Mexican peso saw a spike in overnight options volatility. The Federal Reserve's meeting and potential interest rate cuts add further uncertainty to financial markets.

The dollar eased as traders adjusted positions before a contentious U.S. presidential election, while options volatility soared with changing electoral projections. Democrat Kamala Harris gained momentum in election betting markets, even as some platforms still favored Republican Donald Trump.

Financial markets, which once leaned towards Trump due to his inflationary policies, experienced a shake-up following polls showing a surprising Harris lead in Iowa. As the first election results loomed, traders scrambled to hedge potential currency swings involving the euro and the Mexican peso.

With overnight options volatility at its highest since 2016, market anticipation grew. Uncertainty extended to upcoming central bank meetings, particularly the Federal Reserve's, adding layers to an already tense trading environment.

(With inputs from agencies.)