Stock markets drops as Trump wins the US Presidential Election

The aftermath of Donald Trump’s victory in the 2016 Presidential Election has been felt across financial sectors all over the world as markets in UK, Europe and Asia suffer. The Dollar and Peso have also fallen following the Republican candidate’s victory.

A downturn in the markets was expected if a Trump victory was revealed, and already the FTSE 100 (London Stock Exchange) has fallen 1.6% in wake of Trump’s victory, but has since steadied to 0.5%. The European markets also suffered a hit with the DAX (German Stock Exchange) and CAC (French Stock Exchange) opening 2.8% and 2.5% down respectively.

However the falls were less than expected, as Trump’s victory speech did enough to calm the markets for now. The economic aftermath was anticipated to be similar to that following  post-Brexit, but the falls were not as extreme as those seen in June.

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The Asian markets dropped as the results were coming through, with Japan’s Nikkei index falling by more than 5% whilst China and Hong Kong markets also saw severe drops by the time the markets closed.

With Trump’s comments on Mexicans during the lead-up to the presidential contest, the Peso became the currency to watch, to see how it would react. As Trump’s lead widened, the Peso began to see its largest crash since 1994 – falling as much as 13% during the night.

The Peso had been recovering over the past few days after a Clinton victory seemed to be assured. The Peso’s sharp fall is a clear indication of the fear that Trump’s election brings to Mexicans, but it is also on the rebound.

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The dollar also struggled against ‘safe haven’ currencies such as yen and gold, while the Euro is doing well against it.

While Trump’s promise of big spending on infrastructure has helped to ease the international market somewhat, the real test will be when the President-Elect takes his place in the White House.

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