IronFX: Trump wins US presidency and markets panic | 08/11/2016
November 9, 2016 12:28 pm
Trump wins US presidency and markets panic
American citizens elected Donald Trump to be the 45th President of the United States. It has been a carnage around the markets throughout the Asian morning, with massive risk-off moves, possibly due to the uncertainty surrounding many of his policies. In line with our expectations under a Trump-win scenario, the largest positive reactions were seen in safe havens, while the biggest slides came in the currencies of the nations with heavy trade exposure to the US. Global equity markets tumbled as well.
Let’s start with the collapses. Both the MXN and CAD dropped like a rock against their major counterparts, probably as a result of Trump’s protectionist views and the increasingly realistic scenario of NAFTA being renegotiated or scrapped altogether. Pro-risk commodity currencies such as AUD and NZD plummeted as well, as investors turned away from riskier assets.
Meanwhile, safe havens skyrocketed. The Japanese yen, the Swiss franc and precious metals, such as gold, went through the roof as market participants turned to the security these assets offer. However we should note that even though USD/CHF tumbled, EUR/CHF remained relatively flat throughout all of this, implying that the SNB was probably active in the FX market to curb the franc’s gains.
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Trump wins US presidency and markets panic
American citizens elected Donald Trump to be the 45th President of the United States. It has been a carnage around the markets throughout the Asian morning, with massive risk-off moves, possibly due to the uncertainty surrounding many of his policies. In line with our expectations under a Trump-win scenario, the largest positive reactions were seen in safe havens, while the biggest slides came in the currencies of the nations with heavy trade exposure to the US. Global equity markets tumbled as well.
Let’s start with the collapses. Both the MXN and CAD dropped like a rock against their major counterparts, probably as a result of Trump’s protectionist views and the increasingly realistic scenario of NAFTA being renegotiated or scrapped altogether. Pro-risk commodity currencies such as AUD and NZD plummeted as well, as investors turned away from riskier assets.
Meanwhile, safe havens skyrocketed. The Japanese yen, the Swiss franc and precious metals, such as gold, went through the roof as market participants turned to the security these assets offer. However we should note that even though USD/CHF tumbled, EUR/CHF remained relatively flat throughout all of this, implying that the SNB was probably active in the FX market to curb the franc’s gains.
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To get the latest Forex trading news you should:
• Download the IronFX Research app: http://goo.gl/jhQIxO
• Like us on Facebook: https://www.facebook.com/IronFX
• Follow us on Instagram: https://www.instagram.com/ironfx
• Follow us on LinkedIn: https://goo.gl/wSEbPN
• Follow us on Twitter: https://twitter.com/IronFXGlobal
• Circle us on Google+: https://www.google.com/+Ironfxglobal
• Subscribe to our Channel: http://bit.ly/1foFmCU
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