Donald Trump hinted last night that they should just call the election in his favour despite Clinton leading in all the polls. Voting is well and truly underway in several US estates with over 10% of the expected turnout thought to have already voted. Clinton does still lead in the overall Polls however so many states are considered to be extremely tight.
The USD is thought to be in the short term safer under Clinton as she is considered to be the less erratic of the two candidates, however she does bring with her some policies that are considered business negative. In my opinion if Clinton is elected then this may also bring an interest rate hike in America. This has been one of the most anticipated decisions in years as this time in 2015 the Fed promised 4 hikes this year. One year on and after only one hike we could be on the verge of the second hike.
If there was to be an interest rate hike I would expect a huge amount of strengthening for the USD taking the GBP/EUR well below the 1.20 level once again. Alternatively, if Trump is elected and they were to hold off the rate hike I think Cable may return to its 1.30 level.
When there are general elections the currency for the country tends to suffer weakness because of the uncertainty surrounding the future. When there is such a close race with two very different potential outcomes, the markets can become very volatile. If you’re looking to complete an trades keeping up to date with the currency markets and news can be the difference between trading at the highs and the lows.