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After a long, drawn out political campaign, the US Presidential Election has drawn to a close, with Republican candidate Donald Trump elected to take over the reins and move into the White House. Just like Brexit, the polls that emanated throughout have been completely inaccurate, having predicted Hilary Clinton as favourite in the Presidential race. The Greenback has been sold off after the announcement of Trump’s win, but the move seems rather low key given that the US dollar has only fallen marginally. Near term, volatility could persist, and the world may move to risk off assets and gold. However, most of the pain has come through the stock markets as worldwide, indices have fallen between 3 and 5 per cent. Monetary Policy action from the Federal Reserve will be interesting to watch, since Donald Trump has maintained that monetary policy has to be normalised. A speech by Fed Member Kashkari later today will be closely scrutinised, while gas and crude inventories make up the rest of the data on the economic calendar from the US.
ECB mulls over increasing monetary stimulus
In other news, there have been various reports hinting that the European Central Bank is mulling over increasing monetary stimulus when they next convene in early December. With no economic data of note today, focus will continue to remain on the US Election, as investors try to rebalance their portfolios.
Currency markets look to election for any movement
Much like the euro, Sterling has also gained slightly against the US dollar, close to a 1 month high, after GBPUSD briefly touched 1.2545. With the Bank of England having kept interest rates on hold in their meeting last week, they have also forecasted inflation to creep back up, as import costs rise sharply over the next year, close to their target of 2%. With no economic data out from the UK, most of the direction for major currency pairs will come from the US Election result.
