Obaba re-elected

The big news this morning is the confirmation the President Obama has been re-elected for a second term in the US. Not all the votes are in and counted yet, but he has won significantly more of the electoral college votes than required – 303 won so far, 270 required – and as such is sure of victory even if the popular vote is still too close to call.

Obama’s victory caused a mass selloff of US Dollars positions, as investors moved out of the safe haven US Dollar and back into riskier positions. One analyst said – “the Obama victory, is more risk positive and USD negative as an immediate reaction, but any further reaction in this direction could quickly fade as uncertainty over fiscal cliff settles, which would be USD positive and risk negative.”

So in short, there is likely to be a window of opportunity if you are buying Dollars to achieve a higher rate, but this could be fairly short lived, so get in touch with your CI account manager to check trading levels.

What does this mean for the Euro? Well typically the Euro reacts to the opposite of the Dollar, so you might expect the reverse, but with the Greek position again coming to a head, and UK and European policy announcements at lunchtime tomorrow, the picture is unlikely to be that certain. Stay in close touch with CI to keep abreast of market movements.