America goes to the polls

8 November, 2016

Robin Haynes

It’s finally election day in the USA, after a campaign which has made the UK’s EU referendum battles look like a gentle discussion in the pub. The Dollar weakened last week as Mrs Clinton’s campaign was derailed by an FBI investigation into emails, but on Sunday the news broke that there was no evidence of criminality, giving her a last-minute boost. Current polls have Clinton on 48% and Trump on 44%.

We would expect a Trump victory to cause a weaker (cheaper) US Dollar, and vice versa for Clinton. But there could well be a knock on effect, if the Pound is caught in the middle of a currency ‘see saw’ between the US Dollar and Euro, so GBP-EUR and other rates could easily see some significant knock-on movements in either direction.

Results will be known around 4am UK time tonight, with projections from different States starting to filter through from midnight. Don’t forget if you have currency to buy or sell, you can place orders with Currency Index to execute automatically overnight, should a desired rate become available as results come in.

And as a final thought, opinion polls for recent events have not exactly been accurate (UK election, Brexit…), so don’t rule out a shock result.

Pound sneaks up
Sterling has also maintained its recent cautious improvement, despite a study from the IFS claiming that Britain’s public finances would be £25bn worse off post-Brexit, by 2020. Chancellor Philip Hammond makes his first autumn statement on November 23rd, and it is not likely to be a comfortable one. Sterling has traded slightly higher since the High Court decision that Article 50 could only be triggered after Parliamentary approval.
Chocolate consumers are also feeling the Brexit pinch, after Toblerone cut the weight of bars in the UK by 10%, in a response to rising import costs:

Other news today
We have already had German trade balance and Swiss unemployment today, with the latter a little worse than expected, but the US election will of course be the dominant story. UK manufacturing follows at 9.30am.