Immigration Policy Fallout

Australia’s S&P/ASX 200 has reacted negatively to Donald Trump’s policy banning immigration policy from seven mainly Muslim countries.

President Trump’s recent immigration policy comes amid slight risk aversion in global markets.

The index is down 1.1 per cent at 5650 points, on track for its biggest one-day fall in two months. Overnight futures had indicated only a 0.2 per cent fall.

The broad-based fall in Australian shares comes amid slight risk aversion in global markets. US bonds are down 1 basis point, spot gold is up 0.2 per cent, US stock index futures are down 0.3 per cent and the US dollar is down 0.2 per cent.

Trump’s immigration policy as raised concern about the risk of sudden and extreme policies from the new President. However, despite condemnation from world leaders and corporate America, this recent policy change in itself is unlikely to have any economic effects.

“Investors will continue to be frustrated by the lack of clarity on the economic front as the president continues to focus on protectionism and immigrations,” says OANDA senior trader Stephen Innes.

“But I don’t believe this immigration stance is economically disruptive to the scale where it will dampen Wall Street’s current momentum and the dollar should regain solid ground quickly.”

Most of Asia is closed for Lunar New Year holidays, but volume on the S&P/ASX 200 is line with the 20-day average.

 

THE AUSTRALIAN

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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