Sharechat Logo

Yen, gold gain, stocks drop as prospects of Trump presidency unsettle markets

Wednesday 9th November 2016

Text too small?

The yen strengthened and gold rose, while stock markets fell as US presidential election results showed the possibility of a win by Donald Trump, sending investors to so-called safe haven assets.

The S&P/NZX 50 Index fell 2.4 percent to 6,732.41 at 4.05pm, having traded higher most of the day. Stocks fell across Asia dropped this afternoon with the Nikkei 225 Index down 2.2 percent, the Hang Seng falling 1.7 percent, and the S&P/ASX 200 Index 1.7 percent lower. The Mexican peso had its biggest one-day drop since 1994's Tequila crisis, falling around 8 percent against the US dollar, on the prospects of a US president who has threatened to build a security wall to keep Mexicans out. 

Clinton is seen as the safe candidate, while Trump's trade policy and volatility create uncertainty which investors hate. The New York Times most recently forecast Republican candidate Donald Trump has a 68 percent chance of winning the presidency, having swapped from preferring Democratic presidential candidate Hillary Clinton's chances just before 3:30pm New Zealand time.

Safe-haven global currencies such as the Japanese yen strengthened against the US dollar this afternoon. The yen strengthened to a month-high of 102.01 against the dollar while spot gold climbed 2.3 percent. New Zealand two-year swaps were down 5 basis points to 2.15 percent while 10-year swaps are unchanged at 2.92. 

Global markets became increasingly unsettled last month at the prospect of Trump succeeding in his bid for the White House, following a letter from FBI director James Comey on Oct. 29 announcing the FBI was reviewing emails belonging to Clinton found in the unrelated investigation into Anthony Weiner. The Chicago Board Options Exchange Volatility Index, or VIX, known as Wall Street's fear gauge, rose to a five-month high at its last trade on Nov. 4.

On Monday morning local time, the FBI confirmed no criminal charges are warranted against Clinton, pushing markets higher and causing the VIX to drop 16.9 percent, its biggest fall since June.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report