Well what seemed entirely impossible only a week or so ago is now well and truly a reality. Donald Drumpf is the President-elect of the United States of America with the extremely right-wing Pence as V.P. Initially markets tanked quite dramatically, with the Aussie share market losing about 3% while U.S stock futures plummeted as much as 5%. Gold soared as did the Japanese Yen with investors moving their money into safe haven assets. It was certainly a dark day not only for America and American politics but also Western progress.
Markets however have staged a pretty remarkable rebound overnight as Drumpf changed his tone to a more inclusive less abrasive one. Gold and JPY returned to yesterday morning's levels while the Aussie stock market looks set to rebound strongly by as much as 3.5%.
Obviosuly it's not a simple task to determine the future but quite often clients do expect us to be able to predict things which havn't yet happened. All I can say today is that the volatility is probably not over and so given the Aussie is still range trading and at the moment near the top of recent ranges for EUR, GBP and USD you might want to take risk off the table by booking spot payments or Forwards for future exposures. I find it hard to see a Drumpf presidency without scandal and turmoil, and markets don't like these sorts of things.
DATA RELEASES TODAY:
No data releases today
AUD EXCHANGE RATES:
AUD/USD – 0.7644
AUD/GBP – 0.6133
AUD/EUR – 0.6983
AUD/NZD – 1.0455
AUD/JPY – 80.62
***Above rates are indicative wholesale rates and intended as a guide only***
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Senior Corporate FX Dealer
Phone Patrick - +61 03 9099 8459