Donald Trump is all but certain to become the next US president after broadcast networks projected his victory in several battleground states. Counting is still ongoing in many areas but all the maths points to a stunning (and surprisingly convincing) comeback for Trump and a bitter defeat for the Harris campaign.
Currency markets are scrambling to contain the fallout this morning. GBP/USD fell by a cent and a half overnight and EUR/USD by close to two cents. The pound is approaching its highest level in a month against the euro but it faces a tough task beating back the momentum that the US dollar will likely carry today.
In truth, the election provided little of the suspense it delivered in 2020. As of an hour or so ago, Trump led the popular vote by some five million votes, a far greater margin than had been expected at that stage of the night. So deflated was the Kamala Harris team that it postponed an event at Howard University in Washington DC in the early hours. The sight of Democrat supporters flooding home — as well as jubilant Republican supporters in Florida and an increasingly confident party machinery – told its own tale.
Trump’s path to the magic number of 270 electoral college votes was always likely to run through Pennsylvania. The state has become a bellwether in recent years and, having already secured Georgia and North Carolina by unexpectedly wide margins, a win for the Republicans here looks to be the clincher. Financial markets will wake up with the clarity they wished for but will still need to wait for the full results in the US House of Representatives and the Senate for the complete picture.
Away from the hysteria, US ISM services PMI climbed from 54.9 to 56 last month. That surge was unexpected and means the survey is at its highest since August 2022, amid a rebound in employment and a slight easing in price pressures.
S&P’s UK services PMI was revised up slightly from an initial 51.8 to 52 in October. That represented a slightly improvement for the key services sector but businesses cited an element of uncertainty leading up to last month’s autumn budget.
The Reserve Bank of Australia held interest rates at 4.35% for the eighth meeting on the spin. Policymakers noted that, while headline inflation was falling, the underlying data remained volatile and any reduction in borrowing costs could result in more trouble. As of last night, the Australian dollar had advanced by almost 1.5% against the US dollar since the start of this week.
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