The financial community continued to bet on a Clinton presidential victory in the next 12 hours. As it did, both the Canadian dollar and the Mexican peso rose with the greenback against the yen and Swiss franc.
Many research firms are projecting a Clinton victory in some of the traditional battleground states, and market sources have cited that data as a reason for the currency movements.
The Japanese yen has always been seen as a “safe haven” currency, and an unlikely Trump win would most probably see capital shift into that direction, along with the Swiss franc which also has some level of perceived security. Clinton is seen as a much more stable candidate for the markets, due to her relatively neutral stance on trade, foreign policy and immigration.
Conversely, Republican candidate Donald Trump has promised to re-negotiate the NAFTA with America’s neighbours and even erect a wall between the United States and Mexico which understandably has investors spooked.
“Only a few hours ago VoteCastr agency had Florida trending towards Mrs. Clinton, so this is why we are now seeing Clinton-orientated trading going on in the markets. You could say it’s betting on non-volatility,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management.
“Of course, polls and research data has been wrong before. We only need to look back a few months at what happened with Brexit. A Clinton win in Florida would pretty much seal it for her though.” Poulson added.
The greenback hit a monthly high against the yen at 105.20 and levelled up just below that at 105.06, a 0.65 percent gain. The dollar also saw a quarter percent gain versus the Swiss franc to 0.9767.
The Mexican peso hit a monthly high versus the dollar, rising over 1 percent, and the Canadian dollar, affectionately referred to as the ‘loonie”, also climbed 0.3 percent against its neighbour’s currency.
According to the most prominent polls, Clinton has over a 90 percent chance of claiming the White House, leading to little, if any, hedging on a Trump win. If the Republican nominee were to pull off an unlikely victory come tomorrow morning, the markets will undoubtedly go through a substantial period of high volatility as investors scramble to exit.
As of the last set of data, Clinton is set to easily surpass the 270 Electoral College votes needed to claim victory.
