Presidential Election Outcome What could it mean for the US Dollar and Economi US
The US Dollar (USD) has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States (US) Presidential election due on November 5.
Democratic victory
In a scenario where the Democratic nominee Kamala Harris emerges victorious in the presidential elections, a continuation of policies from President Joe Biden’s administration is likely to ensue. Harris is expected to remain conservative on the fiscal expansion and also maintain the current trade policies, which could hinder better prospects for US economic growth. This could render USD negative.
Republican win
Former US President Donald Trump has been vocal about his plans to raise tariffs on Chinese imports to 60% or higher if re-elected. If that materializes on a Trump victory, it could reignite the US-Sino trade war and threaten the already ailing Chinese economy.
Such a move could amplify China’s response on the trade front globally, prompting major economies to devalue their currencies to limit the impact of the trade barrier. The US Dollar is set to gain in this scenario. Note that China is the world’s biggest trading nation.
If the trade war intensifies worldwide, investors could run for cover in the world’s reserve and safe-haven currency, the US Dollar.(Cay)
Source: Fxstreet
