US election latest close race sends shivers through financial markets

Trump fear is starting to bite financial markets. As Donald Trump prospects start to brighten, the Mexican peso has nosedived, USDMXN is nearly 3% higher in the past hour, gold is also up nearly $20, and US stock futures have turned negative.

It’s worth noting that the night is young, and the key battleground states have yet to announce their final results. However, this is a tighter race than some expected earlier on Tuesday.

Also worth noting – although the House of Representatives has gone to the Republicans, we are still waiting to see what happens in the Senate race. A divided Congress could be a tonic for financial markets, as it would take the edge off of either candidate winning. So, if Trump wins tonight (not beyond the realm of possibility at this stage), but if the Senate goes to the Democrats, then we could see risky assets fall less than expected as the markets would assume the Senate would restrict the more extreme elements of Trump’s agenda.

The night is still young, and both candidates have everything to play for, at this stage.

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