Merrill Lynch explains how it would trade the US presidential election

Merrill Lynch shares its favoured forex trading strategies according to tomorrow's US election results.

"The US elections will continue to dominate the forex in the coming weeks, and tight polls suggest that the markets are not yet positioned for the eventual results.

A victory for Trump in the key states of Florida, Ohio, North Carolina and Georgia is necessary for a Trump victory. In fact, these states should reveal their results early in the US evening around 20:00 (3:00 UK time), which should give an advanced idea of the final result. We are studying two possible scenarios:

If Trump wins FL, OH, CN (California) and GA, buy JPY and CHF, sell CAD against the USD on the forex.

If Trump loses FL, OH, CN and GA, buy USD (except against the MXN and CAD)."