Election day is today and everything is ready. Here is our full guide, video guide, and all the updates. And here is the view from Credit Agricole, which discusses the potential of a BOJ intervention in case of a Trump victory:
Here is their view, courtesy of eFXnews:
The USD was the best performing currency in the G10 and the JPY the worst performer on early Monday trading.
On Sunday FBI Director, James Comey, told Congress that an examination of new emails related to Hillary Clinton’s private server had reaffirmed his earlier decision not to recommend prosecution. The AUD was the second best performing currency as investors decided to put risk back on. The final polls trickling in point to Clinton narrowly leading Trump. The latest poll by NBC News and the WSJ points to Clinton leading Trump 44% to 40%. This close to polling day it is difficult to judge the size of the impact of the FBI findings.
With this in mind, we think that it is unlikely that the FX market will significantly extend the current USD and JPY-cross rally.
…But Japan’s officials are still “worried”. Japan’s ‘FX Intervention Tsar’, Masatsugu Asakawa, remains “worried about the JPY after the US election”, however. In a clear warning to investors, Asakawa has not ruled out intervention in the event of “disorderly moves” in FX. So in the event of a Donald Trump victory this week, the MoF has already threatened intervention to prop up the USD/JPY.Importantly, Asakawa’s language is consistent with G20 Communiques on FX, which allows for intervention in the event of “disorderly” moves in FX.
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