Market chaos after Donald Trump win

Telegraph:-Market mayhem ensued worldwide as the US dollar and stocks nose-dived after political outsider Donald Trump won the US presidential election.

The Mexican peso, which has become the gauge for sentiment on the election, plunged by more than 13pc to an all-time low against the dollar, its biggest daily move in two decades.

The US dollar also took a battering, plunging 2.6pc to 102.350 against the yen, while the greenback lost 1.6pc against the Swiss franc. Meanwhile, the euro rallied to its highest level in two-months, climbing 1.8pc to $1.1225.

Investors piled into safe-haven assets. Gold enjoyed its biggest daily rally since the Brexit vote, as investors shunned risky assets after markets priced-in a Clinton victory.

In Asian trading, Japan’s Nikkei surrendered 5.4pc, while the Shanghai Composite index dropped 0.6pc. European bourses also faltered, with the FTSE 100 opening down 2.1pc, Frankfurt’s DAX shed almost 3pc and the CAC in Paris dropped 2.8pc.

However, the market retreated from sharp losses after traders said Trump’s acceptance speech was balanced and conciliatory.

Kathleen Brooks, of City Index, said: “The first speech by President elect Trump has had a calming effect on the markets. “This suggests that a win for President Trump is not yet America’s Brexit moment.”

With global markets rattled by the prospect of a Trump presidency, chances of a Fed rate hike in December slumped from 80pc to 47pc.

Anthony Cheung, of Amplify Trading, said: “The decision will likely remain the main driver of financial markets for the foreseeable future and the Federal Reserve’s rate hike has now been priced out of December.”

“Although Trump may intend to remove Janet Yellen in the long-run, for the moment the impending volatility will likely shackle the hand of the hawkish Fed.”

Colin Morton, of Franklin UK Equity Income Fund, says this morning’s market reaction has been “surprisingly muted” in light of Trump winning the White House race.

“Given the market rally that has been seen in recent days, it appeared that a Clinton victory had been priced in to the market, but the shock result has not yet produced the volatile response from stock markets that many expected,” he continues.

He thinks UK indices have been the most measured in comparison to their European peers, with some perhaps seeing some upside for the UK through an enhanced trade relationship with the US post Brexit.

“The most surprising aspect of this has been the minimal currency impact – the dollar is slightly down on the yen, but is fairly flat against the euro and pound,” he added.