ForexLive European FX news wrap: Dollar soars as Trump wins US presidential election

US election:

• The calls are officially out now, Trump has won the US presidential election
• Trump: This is a magnificent victory for the American people
• The race for control of the House is playing out accordingly for the most part thus far
• House odds swing back in favour of Republicans
• The race for control of the House remains a tight one
• It comes down to control of the House now
• Here’s why you need to watch for the control of the House now
• Reminder: Here are some of the widely-touted Trump trades

Headlines:

• Treasury yields nudge towards the highs for the day as Trump confirmed as election winner
• Gold Technical Analysis – Is this the beginning of a bigger pullback?
• Markets still see a 25 bps rate cut by the Fed this week but what about next year?
• Chinese yuan feels the pinch with Trump set to win US presidency
• Eurozone September PPI -0.6% vs -0.6% m/m expected
• Eurozone October final services PMI 51.6 vs 51.2 prelim
• Germany September industrial orders +4.2% vs +1.5% m/m expected
• UK October construction PMI 54.3 vs 55.5 expected
• US MBA mortgage applications w.e. 1 November -10.8% vs -0.1% prior

Markets:

• USD leads, EUR lags on the day
• European equities higher; S&P 500 futures up 2.1%
• US 10-year yields up 18 bps to 4.46%
• Gold down 1.6% to $2,700.79
• WTI crude down 1.4% to $70.98
• Bitcoin up 7.7% to $74,467

Donald Trump has been elected the 47th president of the US and the result of that continues to reverberate across broader markets in trading today. The betting markets grew increasingly confident of Trump’s chances right as the Asian session ended and shortly after, it seemed inevitable that he would win the election.

And at the end of the day, it looks to not even be a contest. Trump is set to sweep all the swing states to finish with 312 electoral votes with Harris only managing the bare minimum of 226 votes. Adding to that, Trump is set to even win the majority vote. Sheesh.

During the whole period, Trump trades were at play but cooled off slightly in European morning trade. But with the result now made official, we are seeing the dollar ramp higher again as we look towards US trading.

EUR/USD is now down 2.2% to 1.0690 and poised for its biggest fall since June 2016 amid the Brexit referendum at the time. Meanwhile, USD/JPY is up by 1.8% to 154.40 and keeping near the highs as it stays underpinned by soaring Treasury yields as well.

GBP/USD is down 1.5% to 1.2850 while USD/CAD is up 0.7% to 1.3920 with the loonie being the least hurt from the dollar’s rampage today. Elsewhere, AUD/USD is down 1.2% to 0.6555 currently.

In the bond market, 10-year yields in the US are surging and up by 18 bps to 4.46% at the moment. The angst is taking over as traders mull over what may happen when Trump takes office in January next year already.

As for equities, US futures are ripping higher with little concern as of yet and that positive mood spilled over to European indices as well. The latter saw futures lower initially due to Trump wanting to enact tariffs and raise trade conflict with the EU. But investors are choosing to turn a blind eye to that, at least for now.

Looking elsewhere, gold and oil are among the notable losers from Trump’s victory. But Bitcoin is a big winner as Trump has campaigned to be a champion for cryptocurrency and that is seeing price up nearly 8% to just over $74,000 now.

This article was written by Justin Low at www.forexlive.com.