Asian markets, US$ rattled as Trump closes gap with Clinton

(Hot News Today Thursday 3 November 2016)Asian markets, US$ rattled as Trump closes gap with Clinton TOKYO — Asian shares tumbled to seven-week lows and the dollar lost ground against the yen and the euro yesterday, as investors were rattled by signs the United States presidential election race was tightening just days before the Nov 8 vote. Markets were beginning to rethink their long-held bets of a victory for Democratic candidate Hillary Clinton amid signs her Republican rival Donald Trump could be closing the gap, forcing money out of riskier assets and into safe havens such as the Swiss franc and gold. “Since the FBI reopened its case into Hillary Clinton’s emails last Friday, her substantial lead in the polls has been decimated and some now even show Trump in the lead,”  Mr Craig Erlam, a senior market analyst at Oanda, said in a note. “It’s been clear for some time now that markets would much prefer the stability that a Clinton victory would bring for the US economy and the reaction over the last 24 hours or so since the polls started to change so dramatically just confirm‎s this. Trump risk is well and truly being priced in again.” The news battered markets on Wall Street and in Europe overnight on Tuesday, while the VIX volatility index, which is seen as a measure of the US market’s fears, was sitting near levels last seen after Britain voted in June to leave the European Union. Those losses filtered through to Asia, where Tokyo closed 1.8 per cent lower, while Hong Kong dived 1.4 per cent in late trade and Shanghai ended down 0.6 per cent. Sydney and Seoul each sank more than 1 per cent and there were also sharp losses in Wellington, Manila and Taipei. Singapore shares closed 0.23 per cent lower. In the currency market, traders sold the dollar partly as they suspect Mr Trump would prefer a weaker dol lar given his protectionist stance on international trade. The euro rose to a three-week high of US$1.1069 in US trade on Tuesday, up about 2 per cent from its 7.5-month low of US$1.0851 hit just over a week ago. It last stood at US$1.1065. Against the yen, the dollar slipped to ¥103.69 from three-month high of ¥105.54 set on Friday. “If you had a long dollar position on the view that the dollar would gain because Clinton would win, you would surely close that position because her victory is less certain,” said Mr Koichi Yoshikawa, executive director of financial markets at Standard Chartered Bank. “And people were buying back the euro because that is the currency that had been shorted the most against the dollar,” he added. Heavy selling also knocked the Mexican peso, seen as the most vulnerable to a Trump presidency due to his pledge to build a wall along the US border with its neighbour to prevent the entry of illegal immigrants, and other proposals including slapping tariffs on Mexican imports. The peso, which posted its biggest fall in two months on Tuesday, extended losses to 19.380 to the dollar, its lowest level since early October. The tumultuous presidential race appeared to tighten after news that the Federal Bureau of Investigation was reviewing more emails as part of a probe into Mrs Clinton’s use of a private email server. AGENCIES If you had a long dollar position on the view that the dollar would gain because Clinton would win, you would surely close that position because her victory is  less certain. Mr Koichi Yoshikawa executive director  of financial  markets, standard chartered Bank