Donald Trump’s shock victory stumps world markets
Donald Trump’s victory in the U.S. presidential election saw the U.S. dollar, Mexican peso and world stocks fall on Wednesday, but fears of a Brexit-type shock has not yet appeared.
Investors fear global economic and trade turmoil and years of policy unpredictability as the result of Trump victory, which could discourage the Federal Reserve from raising interest rates in December as long expected.
“I love this country,” Trump said in a victory speech in New York. “America will no longer settle for anything less than the best … We have a great economic plan, we will double our growth and have the strongest economy in the world.”
Japanese yen and gold, the safe-haven sovereign bonds, were giving back ground fast having surged in Asian trading as the election results had come in and proved polls and betting markets humiliatingly wrong.
Early European trade witnessed much measured reaction.
Saxo Bank head of FX strategy, John Hardy said, “The initial reaction in markets was violent”.
“But if you look at it across markets you are seeing a pretty decent reversal off the spike.”
Mexico’s peso also bounced 4 per cent from a record low it had hit overnight, though it was still down 8.5 per cent as emerging markets were the most affected.