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US Dollar Response Mixed as Trump Wins US Presidential Election

US Dollar Response Mixed as Trump Wins US Presidential Election

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • US Dollar gains on commodity FX, drops elsewhere as Trump wins Presidency
  • Japanese Yen set to post largest daily gain since Brexit vote amid risk aversion
  • Sentiment-linked assets likely to remain under heavy pressure in the near term

The financial markets are reeling as results from the US presidential election point to a victory for Republican nominee Donald Trump. The Associated Press is projecting that that Mr Trump has prevailed in Wisconsin, giving him the 270 electoral votes needed for a win. A separate report from NBC News has it that his rival Hillary Clinton has called him to concede the contest having refused to do so earlier even as the math looked increasingly insurmountable.

The anti-risk Japanese Yen is soaring against all of its major counterparts, poised to secure its biggest one-day gain since the June 24 rally inspired by the outcome of the Brexit referendum. The sentiment-linked Australian, Canadian and New Zealand Dollars are bearing the brunt of selling pressure as risk appetite crumbles market-wide. Stocks plunged in Asia and index futures point to continued blood-letting as European and US bourses come online.

The US Dollar has put in a mixed performance. Prices deferred to sentiment trends when compared against currencies at both ends of the risk on/off spectrum, with the greenback rising against commodity-bloc currencies and falling against the Yen. Relative policy bets appeared to be in focus elsewhere however. The US unit falling against the Euro and British Pound as the increasingly remote chance of a December Fed rate hike undermined its appeal given ECB and BOEstandstill.

Fallout from the election outcome will almost certainly overwhelm other considerations in the hours ahead. As noted previously, Ms Clinton represented the “status quo” candidate that represented continuity and predictability for investors, whereas Mr Trump is more an unknown quantity. This means investors will probably continue to trim risk exposure until the dust settles and portfolios can be soberly reallocated, suggesting overnight trends are poised to continue in the near term.

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Asia Session

21:45NZDCard Spending Retail (MoM) (OCT)0.6%0.4%1.9%
21:45NZDCard Spending Total (MoM) (OCT)0.6%-2.0%
23:30AUDWestpac Consumer Conf Index (NOV)101.3-102.4
23:30AUDWestpac Consumer Conf SA (MoM) (NOV)-1.1%-1.1%
23:50JPYBoP Current Account Balance (SEP)¥1821.0b¥2020.0b¥2000.8b
23:50JPYBoP Current Account Adjusted (SEP)¥1477.3b¥1630.0b¥1975.7b
23:50JPYTrade Balance BoP Basis (SEP)¥642.4b¥668.8b¥243.2b
23:50JPYBank Lending Incl Trusts (YoY) (OCT)2.4%2.2%2.2%
23:50JPYBank Lending Ex-Trusts (YoY) (OCT)2.4%-2.2%
1:30CNYCPI (YoY) (OCT)2.1%2.1%1.9%
1:30CNYPPI (YoY) (OCT)1.2%0.9%0.1%
4:30JPYBankruptcies (YoY) (OCT)-7.95%--3.41%
5:00JPYEco Watchers Survey Current (OCT)46.244.444.8
5:00JPYEco Watchers Survey Outlook (OCT)49.047.848.5

European Session

9:30GBPVisible Trade Balance GBP/Mn (SEP)-£11363-£12112Low
9:30GBPTrade Balance Non EU GBP/Mn (SEP)-£3450-£3756Low
9:30GBPTrade Balance (SEP)-£3950-£4733Low
10:00EUREuropean Commission Economic Forecasts --Low

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3

--- Written by Ilya Spivak, Currency Strategist for

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.