Nov 9th 2016: Dollar Sinks, Gold Soars as Trump All But Secures Victory

• “America – What have you done?” This one newspaper headline about sums up the reaction to the likely election of Donald Trump as US President (as of the time of writing). The dollar has dropped off, with trades flooding to the Japanese yen as a safe harbour. There was a wide margin of uncertainty about this election result and so far it seems that margin was significant as Trump heads for a comfortable victory.

• The AUD/JPY and AUD/USD are big losers, which is concerning as the Aussie often acts as a proxy for global risk appetite.

• The yen pairs are sinking lower, though the GBP/JPY is under performing.

• The dollar pairs are on the rise, though the pound is lagging.

• Gold has shot higher, a move which just about sums up the world’s reaction to the news.

Coming up today: 

• Reaction to planned economic releases will be secondary to ongoing reaction to the Trump victory.
• We start the day with UK trade goods balance at 09.30.
• EU economic forecasts follow at 10.00.
• At 15.30, we have US crude oil inventories.
• MPC member Haldane speaks at 18.00.
• We then get the RBZN rate statement at 20.00.

Trade Idea: 

• Uncertainty will continue to reign as the result edges closer to actuality. Even them, investors still won’t know how the first few weeks of a Trump Presidency will pan out.

• A good way to play this is a RISE trade predicting that gold will close above current levels in 14 days could return 81.8%.

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