By Naomi Rovnick, Dhara Ranasinghe and Nell Mackenzie
LONDON (Reuters) – November was a month of clear winners and losers from Donald Trump’s Nov. 5 U.S. election victory.
Trump trades, primarily punishing tariff-sensitive belongings from European exporters to Mexico’s peso and driving funding in direction of U.S. shares and the greenback, proved profitable. Wall Road has rallied, the greenback gained 2% towards rival main currencies and bitcoin surged.
However December may very well be bumpy, with the Trump commerce susceptible to a possible bond market backlash towards fiscal largesse, whereas tariffs may enhance inflation and snarl up provide chains.
“Elevated (U.S.) fairness valuations mirror complacency because the tougher atmosphere we count on is just not priced in,” BCA Analysis stated.
Here is a take a look at some belongings within the highlight.
1/ CURRENCY WOES
The euro has suffered its worst month-to-month drop since early 2022, dropping simply over 3% to round $1.05, on U.S. tariff dangers, political upheaval in Germany and France and a pointy regional financial downturn.
Analysts count on extra volatility within the $7.5 trillion-a-day forex markets as debate rages about how low the euro can go and whether or not Trump actually will enhance the U.S. economic system whereas most others endure.
Mexico’s peso dropped over 1% towards the greenback in November, sterling misplaced virtually 2%. China’s offshore yuan was set for its largest month-to-month drop since Aug 2023, down virtually 2%.
The important thing query in FX markets, Monex Europe senior market analyst Nick Rees stated, is: “does Trump’s election victory presage a basic structural shift within the international economic system, or are markets simply engaged in a knee-jerk panic?”
2/ BITCOIN, BOOM OR BUST?
If there’s one asset that smashed it out of the park in November, it is bitcoin.
The crypto forex has surged 37%, briefly eying the $100,000 milestone, on hopes of a extra crypto-friendly regulatory atmosphere underneath Trump.
The final time bitcoin surged as a lot was February, when cash flooded into new bitcoin exchange-traded merchandise.
So, what’s subsequent? For some within the business, an increase to $100,000 would mark the area of interest asset lastly going mainstream.
“If bitcoin smashes by way of the $100,000 degree… then much more folks might discover crypto on their radar,” stated AJ Bell funding analyst Dan Coatsworth.
Others reckon there’s a danger of speculative extra, that means bitcoin’s surge might simply as simply be adopted by a pointy fall that catches some buyers out.
3/ TECH UNDER TARIFFS
Wall Road’s tech-heavy Nasdaq 100 has scored its finest month-to-month achieve since June as Trump ally Elon Musk’s Tesla surged 33% and AI fervour boosted Nvidia even because the chipmaker forecast slower gross sales progress.