The Australian dollar embarked on one of its most wild rides of the year today after an unexpected win in the US presidential election sent markets across the globe reeling.
At 6.40pm (GMT) the Aussie dollar was trading at US77.58c down from US76.33c in yesterday’s trading.
As the news came in that Donald Trump had won the US presidency against Hilary Clinton, markets and currencies across the world tumbled including the Australian dollar which fell around US2c before recovering some of its losses later in the day.
Analysts, and the market as a whole, had not priced in the scenario of a Trump presidency which lead to the carnage and may be just the start of further falls to come.
“It’s amazing stuff,a complete reversal to the consensus,” IG market strategist Evan Lucas said. “Markets just didn’t price in this possibility. Look at the US futures, they didn’t price this in.”
As Trump lays out his policies in the nearest future which includes severe trade restrictions and protectionist policies, the Australian dollar may come under further pressure as trade between the US and Australia is expected to suffer.
The only bright spot to come out of this unexpected event for the Aussie dollar is the US Federal Reserve are unlikely to now lift interest rates in December so as not to add more jitters to the financial markets which may give the currency some much needed support.
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