2025-03-31 10:29

March 31 (Reuters) - Sterling held steady against the dollar on Monday as Britain hopes to negotiate a deal with the U.S. to avoid President Donald Trump's broader round of reciprocal tariffs this week. British Prime Minister Keir Starmer and Trump discussed "productive negotiations" towards a UK-U.S. economic prosperity deal in a phone call on Sunday evening, a Downing Street spokesperson said. Sign up here. The currency steadied at $1.2936 against the greenback and at 83.665 pence per euro . Economists expect Britain to be less impacted by Trump's tariffs due to the country's more balanced trading position with the United States. That has helped the pound gain more than 2.8% against the U.S. dollar in March, keeping it on track for its best month since November 2023. Against the euro, however, sterling is set for a monthly decline of roughly 1.4% as the European shared currency rallied on the back of Germany's massive spending plans and fiscal reforms. Markets await details of Trump's reciprocal tariffs against U.S. trading partners on Wednesday, with Trump saying late on Sunday that essentially all countries will be impacted. Trump said on Friday he was open to carving out deals with countries seeking to avoid U.S. tariffs, but those agreements would have to be negotiated after April 2. Britain is facing the impact from Trump's tariffs on steel and aluminium which came into force this month and on autos imported into the United States set to be effective on April 3. "There is some stress, but overall, because ...the U.S. runs a trade surplus with the UK according to U.S. data, there is perhaps this perception that the UK, from a political point of view, won't be embroiled in a trade war in the same sort of scale as the EU," said Jane Foley, head of FX strategy at Rabobank. The European Union delayed its first counter-measures against the United States over Trump's metals tariffs until mid-April, allowing it to re-think which U.S. goods to target and offering extra weeks for negotiations. https://www.reuters.com/markets/currencies/pound-steadies-against-dollar-us-trade-tariffs-loom-2025-03-31/

2025-03-31 10:09

FX options demand rises due to tariff risks and lower volatility Investors use digital options for fixed payouts amid market uncertainty Volatility drop reduces cost of opening new FX options positions CME Group sees record FX options volume, driven by trade-sensitive currencies CME reports 76% rise in FX options volume year-on-year NEW YORK, March 31 (Reuters) - Hedge funds and asset managers have been buying up options on foreign currencies as they look to prepare portfolios for market moves spurred by the Trump administration's tariff policies and after a recent pullback in market expectations for currency volatility. With Trump expected to implement new reciprocal tariff rates against major trading partners on April 2, demand for FX options, which give investors the right, but not the obligation, to buy or sell currencies at a specified rate, has jumped this year. Sign up here. "If you want to speculate on ... tariffs actually happening, or any big shocks to the financial system coming from the new administration, FX options and the FX markets in general are having a moment in the sun," said Peter Vassallo, an FX portfolio manager at BNP Paribas Asset Management. The expectation for FX volatility comes after measures of volatility have fallen since January, driven, in part, by profit taking and as tariff measures have so far undershot the markets' worst fears. Volatility measures had risen sharply in the aftermath of Donald Trump's victory in the U.S. election last year. One measure of short-term volatility in the euro has fallen from a near 2-year peak touched in January, according to LSEG data, creating attractive entry points for investors looking to hedge. The drop in volatility has slashed how much investors need to pay to open fresh options positions, either to guard their portfolios or to speculate on specific outcomes. A three-month at-the-money EUR/USD option now costs 16% less than investors needed to pay around the inauguration, while a three-month USD/CAD option is 17% less, according to LSEG data. With the extent of tariffs still uncertain, investors see potential risks on the horizon, making the recent cheapening in FX options a welcome relief. "A lot of participants in the market still see a lot of potential for these tail events, which is completely understandable in the political environment," Vassallo said, referring to risks that can trigger outsized market moves. Volumes in over-the-counter EUR/USD options rose 104% in January to $852 billion, when compared to the corresponding period in 2024, according to data from Clarus, an ION company that researches derivatives. Exotic strategies such as digital options and barriers - contracts that kick in once a certain price threshold is touched - more than doubled in the euro to $26 billion in January and shot up more than 2,000% for CAD to $7.3 billion, Clarus’s data showed. At listed derivatives exchange operator CME Group, volumes rose 76% compared to the same time last year, with an average of $7 billion notional changing hands electronically every day. CME also saw record open positioning in FX options of more than 1.2 million contracts on March 5. The increase is particularly noticeable for trade-sensitive currencies. Volume in euro options rose 105% while Canadian dollar options climbed 227%, according to CME data. The surge is accompanied by new participants entering the market to hedge their exposure in other asset classes, or speculate and take positions, said Chris Povey, head of FX options at CME. Investors' preference for FX options to offset risks is also being helped by relatively lower levels of FX volatility, compared with bond and equity markets, which have seen market gyrations soar in recent weeks, market participants said. While the Deutsche Bank's Currency Volatility Index (.DBCVIX) , opens new tab has slipped to 7.6 from 8.51 when Trump took office in January, the Cboe VIX (.VIX) , opens new tab, a measure of expected stock market volatility, is around 19, up from 15.81. Meanwhile, a gauge of Treasury market gyrations (.MOVE) , opens new tab hit a four-month high in early March before receding. One type of FX contract - digital options - is particularly in vogue, market participants said. Unlike vanilla options, which have wide-ranging payouts depending on how the underlying FX prices move, digital options provide a fixed payout if the exchange rate reaches a specific level at expiration. "With markets remaining extremely choppy and multiple themes playing out simultaneously, clients are on the lookout for optimal risk-reward outcomes with minimal initial premium outlay," said Sagar Sambrani, senior FX options trader at Nomura. One FX options trader at a large U.S. bank told Reuters that asset managers who are worried about losses are also buying digital options as a buffer for their large portfolios. Traders are also employing options spreads - simultaneous buying and selling of call options - to trade their views on tariffs. Options spreads can help limit the cost of the trade by giving up a portion of potential gains. Dan Tobon, head of G10 FX strategy at Citi, said he is using put options spreads to express a view that the euro, which has rallied on news of a surge in German fiscal spending, could retreat when the U.S. implements reciprocal tariffs next month. "You almost have to do things in options to be able to play a theme that's multiple months, because right now headline volatility makes it difficult to stay in trades," said Tobon. https://www.reuters.com/markets/currencies/fx-options-volume-surge-investors-juggle-tariff-risks-2025-03-31/

2025-03-31 09:41

MOSCOW, March 31 (Reuters) - The Russian rouble weakened against the U.S. dollar on Monday after U.S. President Donald Trump said he was "pissed off" at Russian President Vladimir Putin and threatened buyers of Russian oil with tariffs. By 0920 GMT, the rouble was down 0.7% at 85.50 against the dollar in the over-the-counter market. The Russian currency is up by about 25% against the dollar this year, mostly on expectations of easing geopolitical tensions. Sign up here. Trump told NBC News on March 30 that he was very angry after Putin criticised the credibility of Ukrainian President Volodymyr Zelenskiy's leadership. His comments reflect his growing frustration about the lack of movement on a ceasefire. "The news backdrop, at the very least, has halted the formation of optimistic expectations in the market, which limits demand for rouble-denominated assets," said Denis Popov from PSB bank. The rouble also lost support from foreign currency conversion by exporting companies, which had been buying up roubles last week to make their corporate tax payments. "After the exhaustion of fundamental factors that created a slight oversupply of foreign currency last week, there is a risk that the value of the rouble may shift to somewhat weaker levels," Popov added. Against the Chinese yuan, the most traded foreign currency in Russia, the rouble was down 0.2% to 11.70, on the Moscow Stock Exchange. https://www.reuters.com/markets/currencies/russian-rouble-weakens-after-trumps-russia-comments-2025-03-31/

2025-03-31 07:58

AMSTERDAM, March 31 (Reuters) - Dutch natural gas grid operator Gasunie on Monday said it expects to invest around 12 billion euros ($13 billion) through 2030 to help accelerate the energy transition and stop major industries leaving the Netherlands. Gasunie said two thirds of its investment would be for infrastructure for sustainable gases, like hydrogen and biomethane, while continuing work on carbon capture and storage (CCS) projects. Sign up here. The share of what it labels green projects as a proportion of total investments increased from 20% to 45% last year, it said. "The company is taking major steps towards a future in which sustainable gases and green electricity reinforce each other," Gasunie said. Dutch industry has complained about high energy costs and the limited possibilities to make production processes more sustainable. A surge in solar and wind power has led to congestion on the country's electricity grid, while plans for sustainable hydrogen production have stalled. Gasunie CEO Willemien Terpstra called on industry and the government to work together to ensure companies can move away from fossil fuels without losing their competitive edge. "The Netherlands is currently at the tipping point where it will be seen whether we will become more sustainable with industry or without," Terpstra said. "Gasunie wants to do everything it can to keep key industries in the Netherlands." ($1 = 0.9227 euros) https://www.reuters.com/sustainability/climate-energy/dutch-gasunie-expects-invest-13-billion-power-grid-through-2030-2025-03-31/

2025-03-31 07:47

MADRID, March 31 (Reuters) - Spanish Foreign Minister Jose Manuel Albares said on Monday his government will always defend the interests of the Spanish oil company Repsol after sources close to U.S. President Donald Trump said his government would revoke licences granted to oil companies operating in Venezuela. "I had contacts with (Repsol's) CEO, and we are analysing the decision and talking about it," Albares said in an interview with TV channel Tele 5. Sign up here. "We should not rush at this moment until we know the details about the decision, what it means and how it could affect and the margin there is for dialogue to solve the issue and resolve the differences or clarify the doubts the U.S. administration may have," he said. Oil companies Maurel et Prom (MAUP.PA) , opens new tab from France and Eni (ENI.MI) , opens new tab from Italy have said during the weekend they were notified by the U.S. government that respective licenses to operate in Venezuela were revoked. In recent years, former President Joe Biden's administration had granted authorisations to individual companies to secure Venezuelan oil for refineries from Spain to India as exceptions to the U.S. sanction regime on the South American country. Last week, Trump's administration notified the companies it would revoke these authorisations, sources close to the decision told Reuters. The companies that had received licenses and comfort letters from Washington also include India's Reliance Industries (RELI.NS) , opens new tab and U.S. Global Oil Terminals. https://www.reuters.com/business/energy/spains-foreign-minister-says-government-will-always-defend-repsols-interests-2025-03-31/

2025-03-31 07:43

March 31 (Reuters) - A rapidly growing wildfire in California's Eastern Sierra region burned through 1,000 acres and forced evacuations in multiple counties, the California Department of Forestry and Fire Protection (Cal Fire) said on Sunday. The Silver Fire , opens new tab, which ignited around 2:11 p.m. PT on Sunday near Highway 6 and Silver Canyon Road in Inyo County, remained at zero percent containment, Cal Fire said. Sign up here. Evacuation orders were issued for several communities, including Laws in Inyo County, Chalfant in Mono County, and the White Mountain Estates neighborhood, Cal Fire added. A 30-mile stretch of U.S. Highway 6 was also closed. There were no immediate reports of injuries or structural damage so far. The cause of the fire remains under investigation, according to Cal Fire. More than 200 firefighters were battling the blaze, but gusts reaching 35 miles per hour at Bishop Airport grounded some firefighting aircraft and complicated containment efforts, Cal Fire said in a Facebook update late Sunday. The National Weather Service has forecasted southwest winds of 25 to 35 mph and gusts up to 65 mph on Monday for the region. Earlier this year, California's biggest city Los Angeles suffered the worst fires in its history, killing 28 people and damaging or destroying more than 16,000 structures. https://www.reuters.com/business/environment/growing-wildfire-eastern-california-prompts-evacuations-cal-fire-says-2025-03-31/