Post-Election Winners and USD Lose Ground as Investor Concern Abounds

Post-Election Winners and USD Lose Ground as Investor Concern Abounds

US stocks fell again today with financials, transports and other big post-election gainers losing ground while the dollar took a tumble as earnings season kicks into gear.

Image by Getty

Politics dominated global markets as the dollar weakened after the president-elect called the US currency “too strong” and the pound rallied on British Prime Minister Theresa May’s plans to leave the European Union. The greenback fell against most peers after Donald Trump told the Wall Street Journal its value is too high in part because China holds down its own currency. Meanwhile, in Davos, Switzerland, Chinese President Xi Jinping warned about how a trade war benefits no one and would hurt the global economy. Sterling headed for its biggest gain against the dollar since the global financial crisis

The Dow Jones Industrial Average fell 58.96 points, or 0.3% to 19,826.77, the S&P 500 lost 6.8 points, or 0.30%, to 2,267.84 and the Nasdaq Composite dropped 35.39 points, or 0.63%, to 5,538.73.

There is seemingly no end in sight to the impact of Brexit and Trump, twin interrelated themes which have dominated markets both this year and last. Traders are puzzling over the meaning of the president-elect’s comment ahead of his inauguration Friday, while May’s confirmation that parliament will get a vote on the final Brexit deal added to the pound’s momentum against the greenback.

Chinese President Xi Jinping cautioned against protectionism as he pushed back against criticism of globalization by Donald Trump and other Western populists.“Protectionism is like locking yourself in a dark room, which would seem to escape wind and rain, but also block out the sunshine,” Xi told the World Economic Forum, the first Chinese head of state to address the annual gathering in the Alpine resort town of Davos. “No one is a winner in a trade war.”

Xi used his speech to support a global economic order that has helped fuel China’s almost four-decade economic boom. While a surge in global protectionist sentiment threatens to slow the engine of China’s growth, it also offers Xi a chance to advance his goal of shaping global economic systems. In his speech he did not refer to Trump by name.

The pound surged 2.9 percent to $1.2395, while the yen traded at 112.95 per dollar, up 1.1%. The currency has strengthened 3.55 over the last seven sessions.

.   

 


This information has been prepared by Nadex, a trading name of North American Derivatives Exchange, Inc., prepared by independent third parties contracted by Nadex or reproduced form third party news agencies. In addition to the disclaimer below, the material on this page does not contain an offer of, or solicitation for, a transaction in any financial instrument. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.