Unbelievably, Donald Trump has been elected President of the United States – and the decision has seen the Euro Pound Sterling exchange rate fluctuate.
- Euro Pound Sterling Exchange Rate Up Wednesday – US election takes market focus
- Eurozone Retail Sales Mixed – But bloc’s investor confidence up in November
- USD Weakness Leaves Euro Up – US election results are in and USD is down
- GBP Forecast: Limpness Anticipated – US election dominates trade and headlines
Euro Pound Sterling Exchange Rate Fluctuates Widely as Markets React to Election
Despite performing strongly on Wednesday morning thanks to weakness in the US Dollar, the Euro Pound Sterling exchange rate plunged on Wednesday afternoon as the US Dollar recovered from its worst levels.
Trump’s win had certainly shocked markets – evident by the increase in demand for ‘safe haven’ investments. However, the shock was not as profound as some had expected and as USD recovered the Euro’s advantages weakened.
The Pound was given a boost due to a recent lack of downside factors as well as hopes that Britain would be first in line to make a trade deal with Trump’s USA. EUR GBP fell to a monthly low of 0.87 on Wednesday afternoon as investors continued to adjust to the news.
(Previously updated 12:39 GMT 09/11/2016)
Trump Wins US Presidency – Euro Pound Sterling Exchange Rate Benefits from Shock
Despite trending much nearer to the week’s opening levels by Wednesday afternoon as the market-wide shock of the election result began to soften, the Euro was definitely left in a stronger position on Wednesday thanks to weakness in the US Dollar.
Unorthodox Republican Presidential candidate Donald Trump defied expectations in markets by winning the White House. This sent markets into a panic on Wednesday morning in a scenario eerily similar to that of the Brexit vote reaction.
The intensity of the reaction, as well as the Euro’s strength, cooled in reaction to the President-to-be’s acceptance speech, in which he adopted an uncharacteristic calm and ‘Presidential’ tone. This caused markets to hope that President Trump may be less controversial than candidate Trump.
(Previously updated 10:57 GMT 09/11/2016)
The Euro Pound exchange rate falled to a high of 0.90 in the wake of the results of the US election becoming known as EUR was boosted by a weaker USD.
However, EUR GBP later reverted to trending around the 0.89 level as initial panic over the surprising result subsided.
(Previously updated 08/11/2016)
Euro Pound Sterling Exchange Rate Flat as US Citizens Head to the Polls
In a continuation of Monday’s pattern, Tuesday saw the Euro Pound Sterling exchange rate fluctuating in a relatively narrow range throughout the entirety of Tuesday’s European session.
While volatility increased a little when American markets opened, as US traders adjusted their positions ahead of Wednesday’s presumably heavily busy trade-day, EUR GBP remained close to the key level of 0.89 throughout the day.
Due to the Euro’s close correlation with the US Dollar as its most common trade partner, the Euro is likely to feel a stronger impact than the Pound from the market’s reaction to the election result.
A Clinton win has been seen by analysts as an upside factor for the US Dollar – which would mean EUR GBP weakening in this event. The opposite would happen in the possibility of a Trump victory, which still remains a possibility.
(Previously updated 12:44 GMT 08/11/2016)
The Euro Pound Sterling exchange rate continued to fluctuate within a narrow range on Tuesday morning, largely continuing its Monday movement.
As US citizens began to head to the polls in the early hours of the American session, markets seemed almost eerily calm. Many investors readjusted their positions after Monday’s sharp movements, but the US Dollar still remained strong enough to keep the Euro weak and EUR GBP flat.
(Published 07:00 GMT 08/11/2016)
Monday’s Euro Pound Sterling exchange rate saw little change from the weekend, with the EUR GBP exchange rate instead fluctuating in a relatively narrow range as foreign exchange markets shifted their focus towards Tuesday’s US Presidential election.
EUR GBP plunged by over a penny last week due to a surge in demand for the Pound, leaving the pair trending near its worst levels in a month. EUR GBP attempted to hold above the level of 0.89 on Monday due to key support levels.
Euro (EUR) Weakened as Investors Pile into the US Dollar (USD)
The US election has become a key source of EUR USD exchange rate movement in recent weeks. Last week saw the Euro strengthen due to a US Dollar selloff, as markets reacted to news that Republican Presidential candidate Donald Trump had significantly closed the polling gap.
The possibility of a Trump Presidency has caused market panic due to the high uncertainty in his economic and foreign policies. Due to being the US Dollar’s most common trade partner, the Euro was able to capitalise. However, this failed to hold back the Pound’s bullish movement last week.
Monday’s session saw global markets a little more optimistic on the chances of ‘status quo’ candidate Hillary Clinton. As a result, EUR USD gave up some of last week’s gains, while EUR GBP remained stuck around opening levels.
This was because the FBI concluded no criminal activity from its re-investigation into Clinton’s use of a private email server.
Various datasets that are typically influential were published on Monday morning, including Germany’s September factory orders which disappointed, as well as highly mixed sets of retail sales data for the Eurozone bloc.
September’s official retail sales figures slowed from 1.2% to 1.1%, while Markit’s October retail PMI slipped from 49.6 to 48.6.
Sentix’s November investor confidence may have helped the shared currency hold its ground slightly however, after improving from 8.5 to 13.1.
Pound (GBP) Limp as Government’s High Court Appeal Expected
Sterling’s bullishness from last week appeared to be all but expended during Monday trade, as the British currency scarcely managed to hold its ground against the weak Euro while plunging against other developed currencies.
It is likely lingering sentiment from last Thursday’s news that allowed Sterling to hold the Euro’s advances at bay, but this sentiment was no longer strong.
Investors had become more confident in the future of Britain’s economy last Thursday, thanks to a ruling from the UK’s High Court stating that MPs must be allowed a vote on the activation of Article 50.
The UK government reaffirmed its plans to appeal the ruling and take the case to Supreme Court on Monday, which was one of the reasons for Sterling’s Monday slump.
However, Theresa May cooled jitters slightly by indicating that she fully respected the independence of the High Court judges that made last week’s ruling. She stated on Sunday evening;
‘I believe in and value the independence of our judiciary. I also value the freedom of our press. I think these both underpin our democracy and they are important.
Of course the judges will look at the legal arguments. We think we have strong legal arguments and we will be taking those arguments to the Supreme Court.’
Euro Pound Sterling Exchange Rate Forecast: US Election Anxiety Commanding Volatility Today
It’s easy to see how the uncertainty around Tuesday’s US election will be inspiring volatility in global markets and exchange rate movements.
There are many potential ways EUR GBP exchange rates could move on US Election Day. It is likely the Euro will continue to perform poorly throughout Tuesday trade if Clinton’s optimistic polling figures continue to hold steady.
This would be due to increased US Dollar demand holding Euro trade at bay. Investors are likely to pile away from the Euro into the US Dollar as the results announcements near, potentially causing EUR GBP to fall and causing market volatility.
Depending on the closeness of the race, results could be announced before European markets open on Wednesday, or be held up as late as Wednesday’s US session. If Clinton wins as some have forecast, the Euro is likely to weaken in US Dollar cross-flows before markets cool off and return to normal.
However, if Trump wins the White House, the Euro Pound Sterling exchange rate could advance as investors flood away from the US Dollar into its rivals.