US Elections: Its Déjà vu for Asian FX - ANZ

Khoon Goh, Head of Asia Research at ANZ, notes that the Trump has been elected as the 45th President of the United States of America and financial markets have reacted negatively.

Key Quotes

“Unlike Brexit though, we are unlikely to see a sharp recovery in markets this time, as uncertainty over policies under a Trump administration is set to linger for a while.

Risk-sensitive Asian currencies such as KRW look set to weaken further. However, CNY will actually benefit from the USD’s weakness against the G3 currencies. The less trade-reliant currencies like IDR and INR should fare better.

Political uncertainty in Asia is set to rise, and the risk of further capital outflows in the near term will put further pressure on Asian currencies. Even a hold by the US Federal Reserve in December is unlikely to reverse this.”