A first look at President Trump: How are the markets reacting?
While Americans are reeling from what is being dubbed the “Brexit of the US”, it’s déjà vu for us here in the UK this morning.
In market responses similar to that of June 23, the dollar is taking a tumble following property tycoon Donald Trump’s successful bid to become the 45th president of the United States.
Indications from the market in the early hours of this morning showed that the dollar could be in for the biggest fall since 2001 and 9/11, with the Dow Jones dropping 800 points.
But what does this mean for trade and the drinks industry?
This sharp economic downturn puts the pound on more equal footing with the dollar - good news for those looking to trade with the US – although uncertainty is inevitable.
“After months of sterling taking a slamming it could be good news for anyone needing to buy dollars in the near future. The dollar is already down against the pound which means you will get a much better rate than before when you change your travel money,” Hannah Maundrell, editor in chief at Money, said.
“Without a crystal ball it’s impossible to predict whether and how much the dollar will continue to fall against the pound but one thing is for certain, the dollar is in for a rocky ride as the world adjusts to the idea of a Trump presidency.”
Despite market volatility in the US, this hasn’t translated to fine wine platform Liv-ex which has remained quiet over night in comparison to the flurry of activity which took place follwing the UK’s EU referendum.
”Dollar buyers have been in a strong buying position since the result of the EU referendum was announced, helping to push the market upward. The impact of today’s news on currency has been minimal so far – but there are still two months until Trump moves into the White House. If the Dollar begins to weaken, this could test the strength of the fine wine market,” Liv-ex Director Anthony Maxwell said.
The dollar did seem to bounce back somewhat and the stock markets to calm following Trump’s acceptance speech however, in which he vowed to be a ‘president for all Americans’.
Uncertainty abounds once again, this time in America, which is famous for its Californian wines, Kentucky bourbons and craft beers.
What remains to be seen is how teetotal Trump’s approach to trade – during his campaign he threatened to tear up international deals – and the affect his presidency will have on the dollar going forward, will affect the drinks industry in American and further afield.