Markets have reacted feverishly as the prospect of a Donald Trump presidency grows, sending the dollar sliding and investors fleeing for safe havens.
In scenes likened to the aftermath of the Brexit vote, share benchmarks across Asia tumbled and the Mexican peso nose-dived as the battle to win in Florida, a battleground state, went down to the wire before being seized by the Republican.
The tycoon scooped further key electoral college votes in North Carolina and Ohio and his bid for the White House appeared to be gaining momentum, sweeping away pollsters’ predictions of a comfortable win for Democratic nominee Hillary Clinton.
Japan’s Nikkei 225 index dropped 4% to 16,498.17 as the US dollar slumped 3.3% against the Japanese yen, potentially spelling trouble for Japanese exporters. Hong Kong’s Hang Seng slid 2.8% to 22,262.74, South Korea’s Kospi index fell 3% to 1,943.69, and Australia’s S&P ASX/200 lost 2.1% to 5,149.301.
Meanwhile the pound rose 1.2% against the dollar at 1.2529 and the euro was up 2.1% at 1.1259 on two-day figures.
“The dollar is getting slammed as the market prices in the latest 73% probability of a Trump presidency,” AFEX currency specialist Trevor Charsley said.
“EURUSD has gained 2% from its lows but the Mexican peso has lost 10% in three hours. The US asset markets have slumped as well with the S&P future falling 5% as well. The atmosphere in trading rooms is reminiscent of the Brexit vote.”
Trading floors in Tokyo and Seoul were up on opening as exit polls suggested Democratic nominee Mrs Clinton had a modest lead over her Republican rival.
But those early gains fell away as he racked up wins, including a haul of college votes in Texas, reflecting investor concern over what a Trump presidency might mean for the economy and trade.
On his blue collar ticket, Mr Trump has threatened to tear up international trade agreements and pursue an aggressive policy to reshore jobs.
Neil Wilson at ETX Capital described “chaos” beginning to set in, prompting investors to take shelter.
“There was a major sell-off in stocks while havens like the yen and gold are soaring as the Sunshine State gives Trump a very good chance at the White House. Dow futures are down more than 450 points and USD/JPY is trading at just above 102.
“Mexico’s peso is getting whacked and has plunged to close to 20 against the dollar – down nearly 10% from its high earlier this morning. The proxy trade is speaking loud and clear at the moment.
“This is huge – there is now a very real prospect that Trump will win and so markets are repricing everything.”
