The heightened expectations of a U.S. interest rate hike in December has empowered the Greenback against a basket of currencies with prices currently hovering around 101.40 as of writing. Sentiment is firmly bullish toward the dollar with the currency on track for its strongest two-month gain since early 2015 amid the Trump effect.
If Hillary Clinton will win, the dollar and stocks will rise, right? Well, not quite. It is more complicated than that, but bear with me I will explain. The U.S. Presidential Election Day has finally arrived and soon we will know who will be leading the country for at least the next four years: Hillary Clinton or Donald Trump.
Investors have suddenly shifted to a “risk off” mode as a result of the recent shift in momentum towards Donald Trump being declared as the possible winner of the U.S. election in a couple of days’ time.
Politics dominated currency markets on Thursday as U.S. election worries kept the dollar weak against the yen while sterling rose more than 1% after a UK court ruled parliament would have to approve the start of Brexit talks.
An air of caution filtered throughout the equity markets on Tuesday with the FTSE 100 being the only real mover as the index continued its run above 7000. While strong performing mining stocks were seen as the catalyst driving the FTSE 100 higher.
Stock markets were erratic on Thursday with most major arenas violently swinging between losses and gains as the messy combination of depressed oil prices, a resurgent U.S. Dollar and rising European Central Bank stimulus hopes kept investors on edge.
We’ve been through a busy volatile period for the financial markets and while I don’t for a second think it’s passed, we may just be saying them take a little breather so far today. The FOMC minutes on Wednesday didn’t really tell us anything we weren’t aware of already, which is why the reaction to them was fairly muted.
A 10% fall in Chinese exports in September does not only provide a warning signal that the world’s second largest economy is losing momentum, but also suggests a fragile global demand, specifically from developed economies which comes in line with the World Trade Organization’s outlook that global trade growth is slowing.
Crude oil longs took some profits as OPEC pumped up their monthly production numbers in order to make a case for a bigger share of OPEC quota. As OPEC and non-OPEC nations have agreed to limit its total oil production to a range of 32.5 million to 33 million barrels, the breakdown of who gets to pump how much is the focus of the conversations.