Pound Sterling fell sharply in the early hours of this morning by 1.4% against The USD before recovering slightly as it is now a matter of a couple of hours before Donald Trump is officially announced as the 47th President of The United States.
Trumps win comes alongside a win in the Senate will give Trump no opposition to his Pro-Tariff and low-tax agenda. Trumps implementations of tariffs and tax cuts is inflationary which will allow The Federal Reserve to slow the tempo of interest rate cuts, allowing further strength for The Dollar.
With the official outcome still to be announced, there is potential room for The Dollar to strength by another 2% roughly. We've also seen both EUR/USD and GBP/EUR move off the back of this result. The Euro-Zone is the single largest trading partner for The US, and with Trump planning to introduce 10% Global Import Tariffs this will now lead to an increase in manufacturing costs and lower business output in Europe which is dragging the EUR/USD pair to lows of 1.07.
