Cost of Hedging for Declines in Rand, Real Soars on Tariff Peril

The gyrations of South Africa’s rand and Brazil’s real illustrate the complexities traders face in evaluating the potential impact of US tariffs.

The two currencies fluctuated wildly this week, and volatility measures suggest more price swings are in store in the run-up to the Aug. 1 deadline for the tariffs to take effect. The cost of hedging against declines in both currencies has soared.