Former President Donald Trump is on his way to the White House again, with the remaining votes in Pennsylvania not being enough for Harris to take a state that appears essential to Democrats’ path to the White House. With Pennsylvania lost, the Associated Press just declared the election for Trump, MUFG’s FX analysts note.
Trump wins with FX reaction as expected until now
“EUR/USD is now 1.9% lower and we see room for this decline to extend further from here. If anything, this election result looks closer to a landslide victory compared to how close it was anticipated to be.” would be this election. The numbers seem to show that Trump will win over 300 electoral college votes, which will be a huge endorsement of the policies he has been campaigning on. Trump won 304 electoral college votes in 2016, but a key difference. in 2024 is that Trump is on track to win the popular vote, which will reinforce Trump’s determination to implement the policies he campaigned on.”
“We will reportedly hear from Trump soon, which could come before an official declaration of his victory, but that won’t matter this time. Harris has indicated that she will not speak to the nation until tomorrow, when, of course, she will concede defeat.” We indicated in our FX Outlook in October and November that a Trump victory would lead to a potential 7-8% strengthening of the US dollar relative to forecasts if Harris won. That implied EUR/USD would fall below the level. 1.0500 (to around 1.0300-1.0400) by the end of this year.”
“We also suggest a possible initial gain for the dollar during the first 24 hours of 2-3% and the DXY is up about 1.9% so far. The type of speech Trump gives when he speaks tonight may provide some signal of initial policy focus, but there is no reason not to believe that it will focus on tax cut policies (if Republicans win the House); US dollar.”
Source: Fx Street
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