2016-11-09 11:28:59

First results of the presidential election in the United States have demonstrated that Donald Trump may win the election. This candidate from the Republican Party has won in such important states like Florida, North Carolina and Ohio, and achieved such high results, which no candidate of this party has since 2004.

Trump’s victory in these three largest states narrows the gap between the candidates. First results of the presidential election have stirred up financial markets. In response to the information about election the USD fell against the European currency and the safe-haven assets, such as the precious metals, the Yen and the Franc. At the same time the USD has grown against the commodity currencies.

Asian and American stocks indices fell sharply. Japanese Nikkei Stock Average fell by 5.4% to 16251.54 points, which is the recorded low since June 24.
At the opening session day the pair NZD/USD has declined by more than 110 points after the news about possibility of Trump’s victory.

However, after counting of votes the USD is gradually going regaining the losses.

The other important news today is the interest rate decision by the RBNZ. The decision will be published at 23:00 (GMT+3). According to the forecast the rate will be lowered by 0.25% to 1.75%. Earlier, the RBNZ stated that it is necessary to continue monetary policy easing. Current discount rate in New Zealand is at the level of 2.0%, which is one of the highest among the countries with the developed economy, which attracts investors and foreign investors who prefer “carry-trade” strategy.

However, positive New Zealand’s statistics and the rise in prices of commodities, especially dairy products, decreases chances that the Reserve Bank of New Zealand will lower interest rate today, or perhaps in the 1st half of 2017.
If the RBNZ will not lower the rate today, the NZD may go up sharply in the foreign exchange market. In any case, during the period of the rate decision is announced volatility in the financial markets may increase.

NZD/USD