By Evdokia Pitsillidou, Head of Risk Management
Donald Trump is the 45th US president. Financial markets, institutions and traders were expecting a comfortable win of Hilary Clinton but the people of United States voted differently. The markets did not price a Trump victory beforehand so the fluctuation across various instruments was big and markets had to correct prices.
Until 01:30 GMT, it was too early to call results from key states so the market prices did not change much. States were allocated to the two candidates as expected.
From that time onwards, Florida started to lean to Trump, Ohio turned red, as well as North Carolina. All of them were strong signals that Trump might steal the victory from Clinton. As expected, traders reacted fiercely. By 03:00 GMT, US Dollar weakened against Euro and Sterling by 1.389% and 1.131% respectively. As a result, investors started looking for the safe heavens once again, with Yen, Gold and Swiss Franc appreciated by 1.619%, 2.282% and 0.9958% accordingly. Our biggest mover was the Mexican Peso which depreciated by 5.816%, as it was seen as the country that it will have the biggest negative impact in the case of Trump win.
Later in the night, more ‘swing’ states were falling under Trump such as Georgia, Utah, Pennsylvania and Wisconsin. Trump victory was looking more certain and investors continued to trade in the same direction. At around 05:00 GMT, the Mexican Peso reached a level of 20.74 as weakened by 13.33%. Swiss Franc, Yen and Goldstrengthened by 2.65%, 3.54% and 4.55% respectively while US500 tumbled by 5%. Overall, the Dollar Index decreased from 97.800 to 96.028.
Market movements are expected to continue in the next days following announcements by Trump regarding the Mexican wall, trade agreements and the relationship with NATO.