Australian Dollar boost after Clinton rise

08 November 2016 by News Desk   |   SHARE  

Australian Dollar rates improved as US Presidential candidate Clinton was cleared of criminal activity by the FBI.

Australian Dollar was boosted as bets of her chances of winning the election soared and traders indulged in risky assets due to perceived market stability according to currency specialists TorFX

With the Reserve Bank of Australia (RBA) holding a neutral stance on monetary policy, the Australian Dollar will continue to perform strongly if Clinton wins the White House.

However, if Trump pulls a Brexit-style upset the Australian Dollar will freefall as investors scramble towards ‘safe-havens’.

New Zealand Dollar (NZD) – The Pound to New Zealand Dollar exchange rate slipped during Monday’s trade session, but these losses were limited compared to Sterling’s falls against the US Dollar or Australian Dollar.

This is because while US Presidential election bets have led to an increase in risk-on movement, the ‘Kiwi’ is held back by the market-wide assumption that the Reserve Bank of New Zealand (RBNZ) will cut NZ interest rates in its meeting this week.

While the biggest short to mid-term influence on the New Zealand Dollar will be the results of today’s election, the ‘Kiwi’s movements will be pressured to the downside until the RBNZ’s meeting this week.

Australian Dollar boosted after Clinton rise

Pound Sterling (GBP) – None of the day’s news had a considerable impact on Sterling’s market movement during Monday trading, with investors instead shifting their focus towards the US and adjusting their positions ahead of today’s US election.

The Pound had been able to hold last week’s gains against major rivals like the Euro due to lingering sentiment about hopes of Parliament fighting for UK access to the European Union’s single market. However, GBP fell against the US Dollar and many risky currencies due to the latest US election bets.

US Dollar (USD) – The Pound to US Dollar exchange rate lost over a cent in value during Monday trade, as US Presidential election bets suddenly shifted back in the favour of Democrat candidate Hillary Clinton. After Clinton was officially cleared of criminal activity over her use of a private email server on Sunday, markets perceived a higher chance of a Clinton election win, pouring into the US Dollar as well as risky currencies due to hopes of market stability following the election result.

Markets would be eased considerably by the premiership of economic ‘status quo’ candidate Clinton. However, a win for Republican Donald Trump and his unorthodox protectionist policies could send markets into panic.

US citizens take to the polls throughout today’s American session. Depending on the turnout, vote counting could continue well into the night. Results could be posted any time from before European markets open tomorrow to late tomorrow evening. Either way, markets are certain to react to State-by-State results as they come in – which may give some investors déjà vu if Trump manages to pull off a Brexit-style surprise win.

Euro (EUR) – The Pound/Euro pairing fluctuated within a relatively narrow range yesterday as investors and economists focused largely on the imminence of Tuesday’s US election, despite Monday seeing the publication of a few typically-influential Eurozone datasets.

German factory orders slumped in September while Markit’s German October construction score improved slightly from 52.4 to 52.9. The Eurozone’s retail figures were mixed, with September’s official retail sales stats slowing to 1.1% year-on-year and Markit’s October retail PMI contracting at 48.6.

Perhaps the day’s most important Eurozone stat however was Sentix’s November investor confidence score, which surprisingly jumped from 8.5 to 13.1. This helped the Euro hold its ground slightly on Monday, but strength in its rival the US Dollar left the shared currency struggling to stay even with the Pound.

Canadian Dollar (CAD) – The Pound to Canadian Dollar exchange rate plummeted on Monday, losing around half of last week’s gains within hours as markets reacted to an increase in demand for risky currencies. The ‘Loonie’ also benefitted from its own risk-correlated factors, including an increase in crude oil prices of 1.5%.

Prices of oil, Canada’s most lucrative commodity, had slumped last week on diminishing faith towards a planned output cap from OPEC producer nations. However, oil prices were given a leg up on Monday once OPEC Secretary-General Mohammed Barkindo reaffirmed the group’s intention to put a cap on output and indicated a detailed plan would be given out in OPEC’s next meeting. As a result, the Canadian Dollar surged throughout the day, but weakened on Tuesday ahead of the US election.

Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.

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