The recent escalation of U.S. tariffs, particularly targeting Colombia, has intensified fears of retaliatory actions and heightened market volatility. This has led to a depreciation of emerging market currencies, such as the Mexican and Colombian pesos, as investors brace for potential negative impacts on trade balances and economic growth. The uncertainty surrounding these tariffs has fostered a risk-off sentiment, prompting investors to seek safer assets amid concerns over inflationary pressures and disruptions to global supply chains. The VIX, often seen as a "fear gauge," has surged, reflecting increased investor anxiety as global trade tensions rise.
The iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) experienced a significant increase, climbing 8.89% to $45.45 at 13:40 on Monday, January 27.