Initial Market and Global Currency Reactions Following the U.S. Elections

With the announcement of the moment-by-moment results of the U.S. presidential election and the increasing chances of Donald Trump winning, the value of the dollar has fallen against the Japanese yen and the euro. Stock values in Asian and Australian markets, which resumed daily activities simultaneously with the announcement of votes from some states, have experienced turbulence. The value of the Mexican peso is also declining, with Reuters describing its status as a 'free fall.' Mr. Trump had previously promised to review free trade agreements, build a wall at the southern border at the expense of the Mexican government, and curb illegal immigration. It has been suggested that the Bank of Japan and the European Central Bank may need to show more flexibility in their economic policies. The Nikkei stock index in Japan fell nearly five percent on Wednesday, and stock values in other major Asia-Pacific markets dropped by more than three percent. Trump has also expressed his opposition to the Trans-Pacific Free Trade Agreement, which had previously raised concerns in Tokyo before the elections. Last month, the U.S. government and 11 countries in the Pacific region reached an agreement on the principles of forming a free trade area, the largest of its kind in the world. At that time, media reported that this agreement could impact the prices of everything in the future. The Hong Kong stock market was at its worst point in nine months by midday Wednesday. South Korean officials have also stated they are considering possible actions to intervene in the value of the won, their currency. It is still unclear how central banks around the world will react to Donald Trump's potential victory and whether they will take actions described as 'calming' the market. Oil prices have also fallen. The Wall Street Journal reports that the value of this energy source in Asian markets reached its lowest level in three months just hours before noon.