Get Breaking Alerts on Stocks Before The Mainstream Media

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address
We guarantee you to keep your privacy
Connect with us
Financial Press
currencies:-biden-or-trump?-brace-for-a-weaker-dollar-either-way
currencies:-biden-or-trump?-brace-for-a-weaker-dollar-either-way

Breaking

Currencies: Biden or Trump? Brace for a weaker dollar either way

Currencies


Pandemic has created global crisis that ‘far transcends the importance of who holds the keys to the White House’: Standard Bank’s Barrow


MarketWatch photo illustration/Getty Images

It isn’t just stock-market investors who are bracing for volatility around and beyond Election Day next month.

The potential for an unclear result on election night and even a contested outcome is also putting currency analysts on edge, though the ultimate direction for the U.S. dollar following a victory by either Democratic challenger Joe Biden or President Donald Trump is likely to be lower, according to one currency watcher.

“ In our view, Biden is likely to win and investors should position for a weaker dollar, both in the immediate aftermath of the results and for the long haul,” wrote Steve Barrow, head of G-10 strategy at Standard Bank, in a note.

A surprise win by Trump, however, would likely see an initial rise by the currency — partly due to his tax-cutting agenda and partly due to safe-haven demand because investors would fear more of the “combative international politics” that characterized his first term, Barrow said.

But even in that scenario, dollar strength would be unlikely to last, he said, and the currency would likely be much weaker under a Trump presidency, The important takeaway, however, is that the dollar is likely to fall either way.

Why is that? Barrow argued that the COVID-19 pandemic has created a national and global emergency “that far transcends the importance of who holds the keys to the White House.”

Get Breaking Stock Alerts

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address
We are Spam free & Secure 🙂

The legacy of the crisis will be a huge U.S. budget deficit that won’t be financed internally and will therefore require large capital inflows at a time when U.S. yields have lost much of their advantage over other developed countries, while equities still stand at levels that look inflated compared with stock markets in other countries, he said.

The dollar was higher on Thursday, finding support on haven-related buying as an acceleration in COVID-19 cases prompted renewed restrictions on movement in several European countries. The ICE U.S. Dollar Index
DXY,
+0.43%
,
a measure of the currency against a basket of six major rivals, was up 0.4%.

The dollar has been under pressure for much of this year, with the DXY down 2.7% year to date. Thursday’s strength in the dollar came as global equities sold off. The Dow Jones Industrial Average
DJIA,
-0.21%

was down aroun 75 points, or 0.3%, in recent trade, after falling more htan 300 points in early action. The S&P 500
SPX,
-0.48%

was down 0.6%,while the Nasdaq Composite
COMP,
-1.02%

remained down 1.2% as tech stocks suffered.

Written By

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

Breaking

Published: Oct. 26, 2020 at 10:42 p.m. ET Former Secretary of State and first lady Hillary Clinton, seen in a March file photo. AFP/Getty...

Breaking

The Senate voted Monday evening to confirm Judge Amy Coney Barrett to the Supreme Court, overcoming fierce partisan opposition to the vote and marking...

Breaking

The Palazzo Las Vegas and The Venetian Las Vegas are seen in May in Las Vegas, Nev. Getty Images Casino mogul Sheldon Adelson’s Las Vegas...

Breaking

Published: Oct. 26, 2020 at 8:36 p.m. ET A Charles Schwab sign on an office in Lexington Mass. Getty Images Just weeks after closing...

Get Breaking Stock Alerts

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address
We are Spam free & Secure :)

Get Breaking Stock Alerts

Email address

Get Breaking Stock Alerts

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address