Traders rush to snap up FX hedges for Greenland tariff risks

LONDON, Jan 20 (Reuters) - Trader demand for protection against big swings in the euro in early February rose sharply on Tuesday, as concern grew over a possible rekindling of a trade war following U.S. President Donald Trump's tariff threats to Europe over Greenland.

Euro two-week implied options volatility - a measure of demand for hedges against big price swings in that time - shot to almost 6% EUR2WO=, the most since early December on Tuesday, according to LSEG data. Three-month options vol, which is considered more of a benchmark, hit its highest since late November, rising to 6.025% EUR3MO=.

Implied options vol for sterling GBP2WO=, another currency in the tariff crosshairs, rose to a two-month high of 6.464%.