Trump's Stunning Win

How did it happen?

In one of the most shocking U.S. elections in modern political history, Donald Trump has defeated Hillary Clinton. Trump’s upset was one he had been predicting for months, gleefully comparing himself to the Brexit vote in England. Yet it was one that almost no other major predictors foresaw, all giving Clinton various degrees of comfortable leads in their election day predictions.

However, in the early hours, Trump secured victories in the key states of Ohio, Pennsylvania and Florida, where a record 90% turn out of voters was seen, adding to shock victories in North Carolina and Iowa, giving Trump the advantage and moving many to suggest a Trump victory as early as 4.00 a.m. (US time).

Clinton had victories in Virginia, Maine and Colorado, but as the evening drew on the tone in Clinton’s comments became increasingly depressing, suggesting she had surrendered herself to the inevitable defeat.

Immediate effects on the market

• EUR/USD increased to much as 4.17 level while GBP/AED increased to levels of 4.60
• Traditional safe haven assets such as the Yen, the Swiss Franc and Gold have seen an increase as investors look to become risk averse
• The Mexican Peso was down as much as 10% in the early hours, due to negative pressure on USD after electorate results were announced & further due to Trump's aggressive policies towards Mexico

Long term trends

• Trump win casts doubt on Fed's plans to hike interest rates – Simply due to Trump's criticism of Yellen's policy on interest rate
• Markets may rally in the following days as analysts assess the market and potential fallouts

What you should be watching for

• Further declines are anticipated for the US Dollar as the global markets react
• Central bank crisis meetings are expected to take place as Japan and Mexico are already planning dates for these

If Trump's proposed plans to roll out new trade tariffs become a reality, this could be bad news for US equities going forward, as a high level of protectionism is likely to inhibit productivity growth. Trump has already spoken about how he would like to raise tariffs on Chinese and Mexican goods to protect US jobs. He has also threatened to tear-up NAFTA, the free trade deal between the US, Canada and Mexico.

For more information regarding the fallout of the US elections, please contact one of our currency experts on +971 2 491 5757 or email info@delma-exchange.com.