Pound Sterling nosedives as Trump leads US presidential election
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The Pound Sterling plunges against the US Dollar as Trump wins in North Carolina and leads in other swing states. Trump’s victory could significantly dent the UK’s economic growth. Investors see the Fed and the BoE cutting interest rates by 25 bps on Thursday. The Pound Sterling (GBP) plummets to near 1.2850 against the US Dollar (USD) in early London trading hours on Wednesday. The GBP/USD pair faces an intense sell-off as investors rush to the so-called ‘Trump trades’ after various exit polls showed Republican candidate Donald Trump having a clear lead over Democratic rival Kamala Harris in the US presidential election. According to the Associated Press, Trump has been announced as a winner in key swing state North Carolina and is also leading in the other six swing states: Pennsylvania, Michigan, Georgia, Arizona, Nevada and Wisconsin. The impact of Trump leading election polls is clearly visible in risk-sensitive currencies, which are significantly down against the US Dollar. Meanwhile, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, posts a fresh four-month high at around 105.30. Risk-perceived currencies have been hit hard as investors expect higher import tariffs in Trump’s administration, which will significantly impact exports of United States (US) close trading partners. Trump also promised lower corporate taxes if he wins, which would allow the Federal Reserve (Fed) to maintain a hawkish interest rate guidance. Apart from the US presidential election, investors will also focus on the Fed’s monetary policy meeting, scheduled on Thursday. The Fed is widely anticipated to cut interest rates by 25 basis points (bps) to 4.50%-4.75%. Therefore, investors will pay close attention to the Fed’s commentary on interest rate guidance. Daily digest market movers: Pound Sterling is sidelined ahead of BoE meeting Except against the US Dollar, the Pound Sterling…
Filed under: News - @ November 6, 2024 8:23 am