Donald Trump is set to be inaugurated as the 47th President of the United States, with major networks declaring the result early this morning. Republicans have won control of the Senate and are on track to win the popular vote, while more than 100 House seats have yet to be called. The USD has advanced over 1.5% to 1-year highs, 10-year Treasury yields are up 20 basis points, and US equity futures are seeing sturdy gains. The Fed is fully priced to reduce policy rates by 25 basis points at tomorrow’s decision.

EUR/USD rose 0.5% yesterday and is about 2.2% lower today, leading the G10 space in losses post-election. The Eurozone is projected to be a heavy target for Trump policies, whether it be steep tariffs on imported goods (especially automobiles) or pressure to increase defense spending. The Euro now trades at levels last seen at the end of June. Implied rate cut odds have risen across all rate decision dates through the end of 2025. ECB Head Lagarde speaks today.

GBP/USD rose 0.6% yesterday and is about 1.5% lower today, trading at levels last seen in the middle of August. The British Pound is outperforming the Euro due to the asymmetric risks of a Trump Administration on the two economies. British bonds have rallied as traders added to bets on interest rate cuts through the end of 2025. The BOE rate decision tomorrow is 95% priced for a 25 basis point cut.

USD/CAD fell 0.55% yesterday and is about 0.75% higher today, trading back towards recent year-to-date highs. Being large trading partners, the potential tailwind of US fiscal stimulus under Trump to Canadian growth has made the Canadian Dollar the best post-election performer among its G10 peers. International trade data for September missed expectations yesterday, and the BOC’s Summary of Deliberations saw some policymakers worried the 50 basis point cut could drive expectations of further outsized rate cuts and very accommodative monetary policy. Domestic jobs data for October is released on Friday.

USD/MXN set fresh year-to-date highs yesterday and has done so again today, rising as much as 3.4% overnight. The pair trades at levels last seen in August 2022. As expected, the Mexican Peso is underperforming post-election in reaction to Trump trade policies that could include tariffs in the near future. The country appears to have avoided a potential constitutional crisis after Mexico’s Supreme Court dismissed a ruling intended to limit the scope of judicial overhaul passed by Congress in September.