Mr Trump’s victory over Democrat Hillary Clinton led to sharp swings in financial markets.
The Mexican peso— seen as the prime gauge of the candidate’s fortunes — tumbled over 13 per cent, its biggest drop since the country’s 1994-1995 devaluation crisis to a record low of 20.7 to the dollar.
The dollar fell 3 per cent against the yen and 2.1 per cent against the euro. S&P 500 futures were down 5 per cent and gold was up 4.1 per cent. Investors marked the odds of a December rate rise down from 84 per cent to below 50 per cent.
Richard Dunbar, senior investment strategist of Aberdeen Asset Management, said it was clear that markets are buckling as a result of the political outsider’s victory and will continue to.
Mr Dunbar said most investors had calculated that Mrs Clinton would win, and markets are now recalibrating – along fairly predictable lines.
A lot of this selling will be irrational, though. Now is the time for cool heads.Richard DunbarHe said: “There is a natural flight to quality, with assets such as the Japanese yen and gold climbing. Meanwhile those assets most associated with some of Trump's more anti-globalisation and protectionist policies are selling off, with the Mexican peso in the lead.
"A lot of this selling will be irrational, though. Now is the time for cool heads.
“The US remains the country from which virtually all disruptive technology over the last 50 years has emerged; where the rule of law is sacrosanct; with relatively favourable demographics; and broad and deep pools of capital. None of these things have changed as a result of events overnight."
Eric Lonergan, macro fund manager at M&G Investments, said the US election result was Brexit all over again and showed the surge in anti-establishment sentiment is definitively global.
Mr Lonergan said: “Brexit can no longer be dismissed as a freak event. It is a trend. Donald Trump looks almost certain to win, by defying his party, the media, and conventional politics. Populism is coming to power. The critical issue now is what this mean in practice.
“The immediate market reaction is predictable. It is deja vu all over again. Like Brexit, will we see a reversal in asset prices in the next weeks or months?
“Even though both houses are likely to controlled by Republicans, this is no guarantee of agreement on his more outlandish policies (building walls and initiating trade wars).
“He will be pushing on an open door repealing Obamacare and cutting taxes, which are arguably market-friendly, although both are likely harder in practice.
“The critical unknown is whether a Trump presidency pursues the policies of Trump the candidate, in particular his anti-trade, anti-China and anti-Mexico policies. Reason suggests that Congress and financial markets will regulate his ability to act.
“It is equally possible that these campaign rally cries are abandoned with the responsibility of power. But the real concern is that he will do what he says.
“The initial market reaction is consistent with the behaviour we have seen in responses to poll trends. Over subsequent weeks and months, these moves may well reverse.
“On domestic economic policy, the only policies where Trump is likely to secure Congressional support would be on tax-cutting and deregulation - which are likely capital-friendly.
“We might also witness pro-cyclical fiscal policy for the first time since Reagan, which would profoundly undermine bond markets. I would discount Trump's anti-Fed rhetoric. Ironically, looser fiscal policy suits the Fed, because they want to normalise interest rates.
“The greatest irony of this latest outpouring of populism may well be a set of policies which favour capital over labour, and look more Keynesian than neo-liberal.”
Richard Stone, chief executive of The Share Centre, said markets will likely react to President Trump in similar fashion to Brexit.
Mr Stone said: “The result is a surprise and Donald Trump is seen as being likely to have a strong negative impact on global trade if he decides to seek to renegotiate international trade deals, withdraw from international agreements such as that recently made on climate change, and adopt a more aggressive ‘America first’ foreign policy stance.
“The markets will, for instance, reflect on the potential impact on all those US companies that have moved their manufacturing capability to Mexico of a wall on the Mexican border. For example, Ford has some of its manufacturing and assembly facilities in Mexico.
“Similar to Brexit there is every prospect that the market will over-react.
“Donald Trump is above all else, a pragmatic businessman. He has spent his life negotiating and in doing so knows the first statement of your position is not what you expect as the outcome. For example, the idea of a wall between Mexico and the US may sound outrageous, but it appeals to those concerned at the rate of immigration and illegal immigration in particular.
“In reality there are already over 580 miles of wall and fences along the Mexico/US border and the end position after negotiation may simply be a reinforcing of those existing controls and some additional wall sections to replace fencing sections.
“Over the coming days and months investors will also look to see the extent to which Donald Trump appears more moderate and conciliatory. For example, investors and markets would likely be concerned if Janet Yellen leaves the Federal Reserve early given some of Donald Trump’s rhetoric during the campaign.
“In short, in the near term markets globally will react to this shock result badly. It was not one the press or commentators outside of the US really saw coming and fears will abound as to the impact on global trade and global economic growth.
“The shock may be overplayed and the likely impact on the Federal Reserve’s December meeting at which it would probably now be unlikely to raise interest rates may over time help stocks recover the likely short term losses.”
