Dollar is mixed as Trump Wins the Presidency

Dollar is mixed as Trump Wins the Presidency
by, David Frank, Economist

The financial markets are reeling from the results of the United States Presidential election. Republican Presidential nominee Donald Trump is now President-elect and will be the 45^th president of the United States. Donald Trump has one 288 electoral college votes guaranteeing his victory. NBC News has just reported that Democratic nominee Hillary Rodham Clinton has called to concede. She had refused to do so earlier, but the math convinced her victory was hopeless.

This morning the anti-risk Japanese yen soared higher against all its major counterparts. The yen is considered a safe haven currency, especially in the Pacific Rim and Asian region. The yen is now poised to see its largest one day gain since the June 24 rally inspired by the United Kingdom voting to leave the European Union, Brexit. Sentiment linked currency like the Australian Dollar, the New Zealand Dollar and the Canadian Dollar are all under heavy selling pressure today. Global equity markets are also under heavy selling pressure as risk appetite crumbles around the globe. Stocks plunged, on an average of five percent, around the Asian and Pacific Rim this morning and European markets are poised to open significantly lower. The Dow Jones is poised to open 800 points lower in the United States at market open and the Nasdaq Composite and the S&P 500 are pointing to greater than five percent lower at open. Stops have been put in place by the CME which means these markets cannot open lower until 9:30 am EST time. Risk appetite is crumbling around the world and across the breath of the financial markets.

As of right now the US Dollar is putting in a mixed performance. Prices deferred to trends in sentiment when compared to currencies at both ends of the risk on or off spectrum. The Dollar is rising against commodity bloc currencies and falling against the yen. There are policy plays elsewhere in play. The US Dollar is falling against the euro and the British Pound right now as there is an increasingly remote chance the Federal Reserve will raise rates in December. This is undermining its appeal to stalled policies with the European Central Bank and the Bank of England which are at standstills.

Fallout from this heated presidential election in the United States will overwhelm other considerations and calendar events throughout the day. As we have said, previously, Clinton represented the status quo candidate. This gave the markets hope of continuity and predictability which investors like. Trump is more of an unknown. His comments on immigration, trade deal reform and other business related comments does not sit well with economists or investors across the spectrum. Whether or not this turbulence will last will depend who he announces as cabinet members and policy advisers. Only time will tell.

 

 

 

from Bullish University https://www.bullishuniversity.com/dollar-is-mixed-as-trump-wins-the-presidency/