TOKYO, , (Pakistan Point News - APP - 10th Nov, 2016 ) - The Dollar held on to its gains against the Yen and euro Thursday, having rebounded from steep losses early the previous day as Donald Trump scored a shock presidential election win. The greenback was sent plunging in Asia Wednesday as it became apparent the brash tycoon would replace Barack Obama in the White House, with dealers worried his policies could send the US economy into recession.
However, the unit strengthened and US and European stocks rallied after market-favourite Hillary Clinton conceded defeat and Trump gave a reassuring victory speech to soothe worried investors. "He'll certainly be friendly to American business and that could very well stimulate their economy," said Grant Williamson, an investment adviser at Hamilton Hindin Greene, a brokerage in Christchurch, New Zealand. "Investors are now thinking that things aren't going to be as bad as what they had thought.
It was a bit of a shock to most investors initially and now people are getting used to the idea," he told Bloomberg news. The dollar bought 105.32 yen in Tokyo, down from 105.72 yen in New York but still sharply up from the 101.20 yen mark touched in Asia earlier Wednesday. The euro was at $1.0937 against $1.0914 in New York, having touched $1.13 earlier Wednesday in Tokyo. The Mexican peso also held up after recovering from Wednesday's record low.
The dollar was at 19.80 pesos, having spiked at 20.78 in Asia the previous day. Still, the peso remains under pressure owing to Trump's anti-immigrant rhetoric earlier in the campaign, which included a pledge to remove undocumented immigrants, build a border wall and tear up a trade deal with Mexico. Daisuke Karakama, market economist at Mizuho Bank, told AFP: "There is speculation that (Trump's) policy of large fiscal spending and tax cuts could boost the economy and the dollar." However, he added that this scenario looks only at the positive aspect of what could happen. "There are no resources to finance his tax cuts and there was no guarantee that he could get along with Congress given the divide between him and mainstream Republicans," he said. "I don't expect the current dollar rally will last long."