U.S. Election Fears Weigh On Global Markets

A run to safe havens such as the yen and gold on Wednesday shows that the tightening of the electoral race between Donald Trump and Hillary Clinton has left more than just Americans running scared. Asian stock markets weathered heavy selling as traders tried to reposition themselves in case Clinton loses her lead and a Trump presidency is actualized. Spot gold traded at $1,290 per ounce on Wednesday, up from last week’s lows of $1,266.

The Mexican peso continued its downtrend on Wednesday, with the biggest one-day loss in two months, hitting 19.31, to the dollar, following a decline of 1.3 percent on Tuesday. The S&P 500 Index also faced heavy losses on Tuesday, closing at four month lows, while on the currency markets traders sold dollars aggressively as well. The dollar slid down to 103.69 yen. The euro rose against the dollar as well, hitting $1.1069 in Tuesday’s session, up two percent from last week’s seven-month lows.

Asian markets continued to operate on election fears on Wednesday with Australia’s ASX 200 slipping 1.54 percent, the Shanghai composite down 0.49 percent and South Korea’s Kospi 1.35 percent lower. The U.S. CBOE Volatility Index, known as the ‘fear index’ because it tracks volatility expectations, broke the critical 20-point level on Tuesday, a 40 percent rise in the past six days alone, and the first such dramatic rise since the U.K.’s vote to leave the European Union.

The Federal Reserve will conclude its two-day policy meeting today, though expectations for a rate hike this month are holding steady at “slim-to-none.” 86 percent of people polled still believe that a rate hike is likely in December.