Asian markets tank as Trump fallout intensifies

By the break Tokyo had plunged 1.4 percent, while Hong Kong shed 0.4 percent, Sydney dived 1.3 percent, Seoul was 0.5 percent off and Singapore gave up 0.4 percent. Shanghai lost 0.2 percent, Wellington 0.7 percent and Taipei 0.6 percent.

There were also heavy losses in Manila and Jakarta.

“There is a very high level of uncertainty oozing from the markets but one thing that is crystal clear, investors now believe that at a minimum the rising US political entropy will jeopardise the White House policy agenda, and at the extreme, a Trump impeachment will lead to a flat out market collapse,” said OANDA senior trader Stephen Innes.

The uncertainty fanned a flight to safe assets, sending the yen and gold rallying, while the VIX gauge of volatility — also known as the fear index — soared 50 percent.

The dollar tumbled as dealers began to reconsider the chances of a Federal Reserve interest rate hike next month, which had been widely expected.

In Asian trade the greenback sank below 111 yen for the first time since the end of April, while the euro — itself buoyed by easing uncertainty in the EU and a pick-up in eurozone economic fortunes — continued to levels not seen since Trump’s election win.

AFP

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

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and 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

Latest posts by Stephen Innes (see all)