Intraday Market Thoughts

Trump Reverses Year-to-Date

by Ashraf Laidi
Dec 6, 2016 22:23

Since Donald Trump's victory in the US presidential elections, the British pound has been the biggest winner among G10 currencies, accompanied only by the Canadian dollar in being the currencies gaining versus the US dollar. On the losing side, the yen is the biggest decliner since Nov 9, followed by the franc and the Aussie. Why is this news? These developments are the mirror image of the year-to-date picture, whereby GBP remains the biggest loser against the US dollar (and other G-10 currencies) and the JPY is the leading gainer.

Trump's victory, based on the notion that his administration will be give the shovels and fiscal green light from a fiscally conservative Congress trigger a positive shock into the US economy, thereby boosting growth and yields. The resulting rally in global equities raise credible commentary about a great rotation from bonds to stocks. The situation is more bonds-negative than it was during the taper tantrum of 2013. We explore these themes in our Premium video charts on USDX, EURUSD, USDJPY, gold, oil, silver and global equity indices.  We also closed our NZDCAD trade with +130 pips for 2 tactical reasons.


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