A Financial Trump-Quake Hits The Markets – USD Falls As Much As 13%

Global markets are in a turmoil as at time of writing, Donald Trump is to be the next president of the United States. As a vocal advocate of immigration and tougher trade terms with other Countries, the markets fear that his unpredictable nature in combination with the previous mentioned facts, will have a toll on the US and global economy. The Dollar has been heavily sold off while Gold has surged the most in years. Stocks are in a panic selloff as well. 

Currencies: The Dollar has been hammered across the board overnight, with the Mexican Peso dropping as much as 13%. EURUSD traded just below 1.13% from 1.105 yesterday while USDJPY dropped to 101.28 from 105.40 yesterday. Emerging currencies are also taking a hit with USD/ZAR and USD/TRY up 4.2% and 2.3% while Asian currencies are seeing more limited losses. The Canadian dollar fell to an eight-month low of $1.3525 per dollar.

Stocks: If Currencies were volatile, stocks indices were brutal. The Dow Jones dropped 750 points while the DAX and UK FTSE are expected to open 4%-5% lower. Asian stocks fell sharply, with Hong Kong’s Hang Seng Index HIS down-2.38% . The Nikkei 225 slid 750 points, or 5.3%, to 16,477. Australia’s all-ordinaries index XAO, was off 126 points, or 2.4%, at 5,216. Investors were clearly unprepared for Trump to perform so strongly, making it the second time this year that markets have mispriced the odds of a major vote in one of the world’s largest economies. The first was the U.K.’s vote to leave the European Union on June 23. Today’s US stock market session will likely be a bloodbath as well.

Oil and Gold: As always, in times on uncertainty, Gold is poised to gain and this is what happened last night. Having traded as low as $1280 yesterday, the yellow metal rose to as high as $1337 and trades at $1318 at time of writing. Oil was also rocked dropping to as low as $43.05 from $45 yesterday.