Mexican peso plunges to all-time low

The peso, which had been viewed as a proxy for Trump’s chances of winning, plunged more than 11 per cent, while the US dollar fell against the yen.

(AP Photo/Richard Drew, File). Arizona Governor Doug Ducey described Mexico as “Arizona’s number one trade partner, times four”, he told KTAR in September.

As FX markets reeled in the initial Asian fright, South Korean authorities were thought to have intervened to steady their currency, and dealers wondered if central banks globally would step in to calm nerves.

The peso has repeatedly been under pressure on the prospect of a President Trump as he has promised to build a wall to crack down on immigration.

Other Asian markets dropped, and USA stock futures plunged.

Another point of interest will center on the U.S.’s trade relations with China and its impact across Asia.

As the reality of Donald Trump’s victory over Hillary Clinton begins to set in, global consequences are already rolling out, and they’re as scary as one might have predicted.

“He could have stood up and listed off China, NAFTA, the wall – he didn’t go anywhere on those policies, so that will be at least somewhat reassuring to markets”, said Derek Halpenny, European Head of Global Markets Review at MUFG in London. The market-implied probability of a December move fell to as low as 47 percent, based on USA overnight indexed swaps.

Clinton called Trump to concede the presidential election early Wednesday after a stunning turn of events in Tuesday’s contest. The dollar is now trading up a third of a percent on the day against a basket of currencies at 98.841, breaking past 106 Japanese yen – a 4-month high – for the first time since July.

One currency that remains heavily sold is the Mexican peso.

With market uncertainty running deep over what a Trump presidency might mean for economic policy, traders quickly latched on to talk that the new administration will usher in higher economic growth and inflation, sending U.S. bond yields surging overnight. The devaluation of the peso in the aftermath of the election points to a “clear uncertainty” of what will happen in a Trump Presidency, he added.

“We haven’t taken any measures regarding the stock market reaction to the USA election yet, but we are constantly monitoring the markets and the USA elections”, said Kang Byung-mo, head of financial market analysis at Korea Exchange.

“Whilst markets seem optimistic going into this, we can not help but feel some of these moves are a little too pre-emptive”, he said. During the victory speech of the 45th President-elect, the global stocks recover from earlier losses.

Russian President Vladimir Putin said he was ready to fully restore ties with the United States following Trump’s victory.

Historical volatility on the MSCI Emerging Markets Currency Index rose for a third day, after falling to a nine-month low last week. The Stoxx Europe 600 index opened about 2 percent lower but turned positive in the afternoon.

Top officials from Japan’s central bank and finance ministry were to meet later Wednesday to discuss how to cope with the gyrations in financial markets.

Asian stocks skidded, with MSCI’s broadest index of Asia-Pacific stocks outside Japan down 2.5 per cent and the Nikkei off a savage 5.4 per cent. “Like Brexit, the rally over the last two days increases the downside potential if Donald Trump does win the election”, he added, referring to Britain’s unexpected vote to leave the European Union that shook world markets.

Chan contributed from Hong Kong.