Wild dollar swing upended FX options hedges

- By Joe Parsons
- @Joe_Parsons416
- 02 Feb 2026

The selloff in the US dollar last week against the yen and euro forced many foreign exchange options dealers to hurriedly buy back expensive hedges for trades that had been knocked out by the surge in spot and volatility.

“In euro/US dollar, 1.20 was a big psychological level and lots of hedge funds and corporate clients had barriers around that. When it did hit 1.20, it was quite an aggressive move and spot went up to 1.2080. That was somewhat reminiscent of the barriers that got triggered on

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@fx-markets.com or view our subscription options here: https://subscriptions.fx-markets.com

You are currently unable to print this content. Please contact info@fx-markets.com to find out more.

You are currently unable to copy this content. Please contact info@fx-markets.com to find out more.

As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.

If you would like to purchase additional rights please email info@fx-markets.com

You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.

If you would like to purchase additional rights please email info@fx-markets.com