Dollar Steady as Markets Bet on Clinton Victory

The US Dollar rose on Monday after the Federal Bureau of Investigation (FB) concluded that the Hillary Clinton, the Democratic nominee for US president would not face criminal charges. This has given Clinton a bit of a boost going into today’s elections as millions of Americans take to the polls to decide who will sit in the White House after Barack Obama.

The Dollar gained 0.75 percent in the US Dollar Index (.DXY) after being hammered the week before. Two weeks ago FBI Director James Comey said that his agency would investigate another batch of emails concerning Clinton and her reckless use of a private server while she served as secretary of state. This boosted the Republican nominee, Donald Trump. If he wins, this outcome would send shockwaves through the global financial markets.

The FBI concluded, this past Sunday that it would stand by their earlier finding that while reckless she was not criminally negligent and would not face charges nor ongoing investigations. This news sent the Dollar rising against the yen, euro and gave a jolt to Mexico’s peso.

The global financial markets want to see continuity. In order to obtain this they are pricing in a Clinton victory today. This is why the markets are reacting to anything that either hurts or boosts her chances to win and why they have taken back some of the losses over the last week or so.

There are a lot of wide-ranging political concerns should Trump win with regards to a Democratic sweep to the US Presidency, Senate and House of Representatives. The US and global financial markets ate now fairly confident of continuing with status quo.

This will be a tight race but markets are hopeful Clinton will win. Republicans should retain the House and Democrats the Senate. Hence continuity and the status quo.

Trump has a rather harsh stance on immigration and foreign policy. This has made the Mexican peso a proxy of the US elections and it has been rather turbulent as of late. A Trump win will not be good for Mexico’s economy.

The peso was boosted by the FBI decision and rose 2.5 percent against the Greenback yesterday on its way to its largest single-day gain since September 27. The peso has now hit a 12 say high at 18.55 per Dollar.