Business Daily Media

Global investors are pricing in a decisive victory by Donald Trump. Global broker Octa explains early market reaction

KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 6 November 2024 -

Current developments and key facts
As of 7:00 a.m. UTC, most data providers, including ABC, CBS, NBC, and CNN, projected that Donald Trump would become the next president of the United States.

However, even as Trump’s victory looks almost guaranteed at this point, it is the balance of power in the U.S. Congress that will determine how successfully and effectively the next president will be able to govern. So far, Republicans have won an extra seat in the Senate, but neither of the parties has a clear advantage in the battle for the House of Representatives. Overall, the counting of votes is still at a relatively early stage, and it could be hours or even days before a final outcome is known. The contest will come down to seven swing states, only three of which (North Carolina, Georgia, and Pennsylvania) have been most likely won by Trump so far. Still, judging by the latest market reaction, it appears reasonable to infer that global investors are pricing in a decisive victory by Donald Trump.

Octa

Initial market impact and reactions
As of 7:00 a.m. UTC, the global markets were positioned for Donald Trump’s victory. U.S. Treasury yields and U.S. stock benchmark indices rallied sharply, pushing the U.S. Dollar Index (DXY) higher. Given that, it is no wonder other major fiat currencies plunged, with EURUSD and GBPUSD down 1.82% and 1.32%, respectively, while bitcoin hit a new all-time high of $75,410, as per Coinbase.

'Such a dramatic shift in market sentiment is explained by Trump’s official policies, or more precisely by the possible effect these policies are likely to have,' says Kar Yong Ang, a financial market analyst at Octa Broker. 'Generally, it all boils down to Trump's tax, immigration, and trade policies, which differ greatly from what Harris proposed. The market perceives them as inflationary, which is why we are seeing a bullish impact in the U.S. dollar.'

The United States controls the world's primary reserve currency, the U.S. dollar, so only a few countries will not feel the effect of the latest U.S. presidential and congressional elections. Major currencies are already experiencing the initial impact. 'Major currencies are falling predominantly because the U.S. dollar is rising, but there is also a fear that Trump's policy on tariffs may hit their domestic economies,' Kar said.

Indeed, the primary reason for such a dramatic decline in EURUSD, for example, is that investors fear that Trump's policies on immigration and taxes will spur inflation and force the Federal Reserve (Fed) to tighten its monetary policy. This could widen the difference in interest rates between the U.S. and the Eurozone, making the U.S. dollar more attractive to investors. Additionally, Trump has previously mentioned the possibility of imposing tariffs on European goods such as automobiles and chemicals, which adds to economic concerns. According to some analysts, Trump's proposed 10% universal tariff on all U.S. imports may erode Europe's GDP by up to 1.5% or about €260bn. A similar kind of impact may await the United Kingdom, where Trump's blanket tariffs would hit billions of pounds of U.K. automotive, pharmaceutical, and liquor exports. It stands to logic that GBPUSD was down more than 1.3% today.

For similar reasons, CNYUSD (Chinese renminbi / U.S. dollar spot rate) hit a 3-month high. 'For the Chinese economy, the risks are even greater, as Trump promised to impose higher tariffs on Chinese goods. On top of that, under his administration, tensions are likely to grow over the CNYUSD exchange rate,' comments Kar Yong Ang, a financial market analyst at Octa Broker. Although the currency policy of the future Trump Administration is unclear, in his interview with Bloomberg, he had this to say: ‘We have a big currency problem because the depth of the currency now in terms of strong dollar / weak yen, weak yuan, is massive.'

Interestingly, the impact on the gold market has been relatively muted so far. As of 7:00 a.m. UTC, XAUUSD was down 1.2%, but historically, it is not a significant swing, especially given how much the U.S. dollar has strengthened. 'Because Trump's victory appears to be decisive, it lowers the probability of social tensions in the U.S., which is not a minor factor considering how fractious U.S. politics has become lately. Thus, XAUUSD is selling off, but I think there are bullish risks ahead as relations between China and the U.S. turn bitter,' comments Kar Yong Ang. Analysts suggest that Donald Trump's policies could escalate trade tensions between the U.S. and China, which may increase the appeal of gold as a safe-haven asset. Additionally, his proposed large-scale tax cuts could potentially widen the U.S. fiscal deficit, prompting some strategic investors to move away from the U.S. dollar and into alternative assets like gold and bitcoin. Notably, BTCUSD reached a new all-time high following the news of Trump's projected victory, as he is generally perceived to be more supportive of cryptocurrencies compared to Harris.

In the short term, all the bullish dollar trades may temporarily reverse as traders buy the dips in EURUSD and GBPUSD in hope of a technical rebound. In the long term, however, the bearish pressure on these pairs will likely persist.
Hashtag: #octa #trump

The issuer is solely responsible for the content of this announcement.

Octa

is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

In the APAC region, Octa received the ‘Best Trading Platform Malaysia 2024’ and the ‘Most Reliable Broker Asia 2023’ awards from Brands and Business Magazine and International Global Forex Awards, respectively.

News from Asia

China Wantian Holdings was awarded the "2024 Hong Kong International ESG Award"

HONG KONG SAR – Media OutReach Newswire - 6 November 2024 - At the "2024 Hong Kong International ESG Awards Ceremony" held today at the Island Shangri-La Hotel, China Wantian Holdings Limited (Stoc...

YF Life Shines at Hong Kong FinTech Week 2024

Exchange views with industry leaders on the evolution of FinTech HONG KONG SAR - Media OutReach Newswire - 30 October 2024 - The main conference & expo of the Hong Kong FinTech Week 2024, one ...

Novo Nordisk Pharma (Thailand) Ltd. Clinches Triple Triumph at Asia Pacific Enterprise Awards 2023 Thailand

SINGAPORE - Media OutReach Newswire - 22 December 2023 - Novo Nordisk Pharma (Thailand) Ltd. has emerged triumphant by securing three prestigious accolades at the Asia Pacific Enterprise Awards (A...

Kumwell Corporation Public Company Limited and CEO Boonsak Kiatjaroonlert’s Double Triumphs at the Asia Pacific Enterprise Awards 2023 Thailand

SINGAPORE - Media OutReach Newswire - 22 December 2023 - Local manufacturer and distributor Kumwell Corporation Public Company Limited (Kumwell) and its CEO, Boonsak Kiatjaroonlert, were honored w...

Mr. Clement Lin from NEXCOM bestowed with Master Entrepreneur Title at the Asia Pacific Enterprise Awards 2023 Taiwan

SINGAPORE - Media OutReach Newswire - 20 December 2023 - The Asia Pacific Enterprise Awards (APEA) 2023 is pleased to honor Taiwan's outstanding business leaders and enterprises who have played in...

Cosdent and Managing Director Sansern Kiattivejsoonthorn Transform Thailand’s Dental Service Landscape, One Smile at a Time

SINGAPORE - Media OutReach Newswire - 20 December 2023 - Founded in 2014, Cosdent Dental Clinic (Cosdent) is a beacon of innovation in the dental sector with Managing Director Sansern Kiattivejsoo...

FORESTAR Brokerage Co., Ltd. Presented with Corporate Excellence and Inspirational Brand Awards at the Asia Pacific Enterprise Awards 2023 Taiwan

SINGAPORE - Media OutReach Newswire - 18 December 2023 - The Asia Pacific Enterprise Awards (APEA) 2023 is pleased to honor Taiwan's outstanding business leaders and enterprises who have played in...

Gourmet One Food Service (Thailand) Co.,Ltd.'s Padchcharrin Heimeaungkloon Shines as Master Entrepreneur at Asia Pacific Enterprise Awards 2023 Thailand

SINGAPORE - Media OutReach Newswire - 18 December 2023 - Enterprise Asia is pleased to honor Padchcharrin Heimeaungkloon, Managing Director of Gourmet One Food Service (Thailand) Co.,Ltd. (Gourmet...

Asia Responsible Enterprise Awards 2024 China Chapter Shines Light on ESG Champions Setting the Standard for Sustainability in Asia

SHANGHAI, CHINA - Media OutReach Newswire - 6 November 2024 - The Asia Responsible Enterprise Awards (AREA) 2024 China Chapter recognized companies leading the way in sustainable business practice...

Artistic Biomedical Limited Company Garners Two Accolades at the Asia Pacific Enterprise Awards 2024 Taiwan

SINGAPORE - Media OutReach Newswire - 6 November 2024 - Artistic Biomedical Limited Company took home two awards at this year's Asia Pacific Enterprise Awards (APEA) 2024 Taiwan Chapter, held at t...

Succession: the real-life lessons in succession planning for Aussie SMBs

The fourth and final season of HBO’s hit series, Succession, is drawing to a close. Captivating audiences with its gripping drama and pithy one-li...

Business Training

3 Simple Ways to Earn More Dog Walking Clientele

A dog walking business can be very lucrative. Pet owners outside the house for significant periods lean on this service to care for their furry fr...

Business Training

What Is A Level 2 Electrician And When To Engage One

Do you know when to hire a level 2 electrician? Knowing the qualifications of an electrician, and when one is needed, can be daunting for those wi...

Property

SMEs urged not to overlook domain names

More shoppers are seeking out Aussie businesses online. A com.au domain name says your business is local.   *  70% of respondents to a surv...

Business Training

Executive Burnout

Throughout my time working in human resources as a psychologist, I've seen firsthand the toll that burnout can take on workers, particularly those...

Business Training

Most Attractive Places for Horse Riding Lovers in Spain

With a long and rich history of horse riding culture, Spain is one of the most popular destinations of its kind, not only in Europe but in the wor...

Business Training