Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


US election result to have greatest impact on currency

11.06 AEDT, Wednesday 7 November 2012

US election result to have greatest impact on currency and commodity markets

By Ric Spooner (Chief Market Analyst, CMC Markets)

Last night’s price action gave an insight into the likelihood that the biggest market impact from an Obama victory will be in the US dollar and commodities.

Currency traders will also be focussed on the passage of budget legislation through the Greek Parliament this week. However, assuming this happens, an Obama victory leaves the way open for near term weakness in the US dollar and consequently stronger commodity markets. Precious metals in particular may benefit from this scenario and it appears markets are now positioning for an Obama victory.

An Obama victory makes it highly likely that Mr Bernanke will be replaced by a likeminded Fed Governor when his term expires in 2014. This means continued expansionary monetary policy into 2014 and beyond if required. This is a potentially bearish scenario for the US Dollar and bullish for gold.

At the same time, concerns over resolution of the fiscal cliff may also be bearish for the US Dollar. In the near term, these concerns are likely to be heightened if Mr Obama is returned as President but the Republicans retain control of Congress.

Historically, the election result has not usually led to major stock market moves. This is partly because the market often has a clear view of who is favourite prior the election. In this case, although the result is more uncertain it is not so clear which candidate will produce the best result for the overall market and economy. The healthcare and defence sectors will respond positively to a Romney victory. However, the overall market is likely to remain cautious until the fiscal cliff problem is satisfactorily resolved.

© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade: NZ Trade Deficit Widens To A Record In September

Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years. More>>


Animal Welfare: Cruel Practices Condemned By DairyNZ Chief

DairyNZ chief executive Tim Mackle says cruel and illegal practices are not in any way condoned or accepted by the industry as part of dairy farming.

Tim says the video released today by Farmwatch shows some footage of transport companies and their workers, as well as some unacceptable behaviour by farmers of dragging calves. More>>


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


International Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news