Us Election Effect On Forex Market

A mixed composition of congress could be the worst outcome for financial markets while full democratic or.

Us election effect on forex market. With the assistance of data from the last ten us presidential elections history reveals the stock market more specifically the us benchmark dow jones index typically rises on average before. With clinton and trump currently leading the survey it s. We explore these relationships and the possible impact on the gold market heading into election 2020.

Elections are coming down to the wire with just one day to go until november 3. The us dollar as well as us bonds might strengthen for example with trump s victory due to his trade war against china and overall political course. It s well established that elections both influence and are influenced by the state of the economy.

According to a 2019 dimensional funds report the market has been positive in 19 of the last 23 election years spanning 1928 2016. Negative returns arose only four times in that period and each of these four years were accompanied by geopolitical events that caused major uncertainty including the great financial crisis in 2008. Presidential election has a great bearing on the direction of the domestic economy and the potential influence on the usd itself can be substantial.

The report listed three key factors which will determine how the forex markets respond to the election according to a report by goldman sachs. How the presidential election affects the us economy and gold. The us presidential election coupled with the pandemic and looming.

With this outcome it is possible that for instance eur and gbp might decrease against the us official currency. The election aftermath could mean significant changes in legislation enactments monetary policies and administrative policies. This forex market analysis looks at the effect the election is having on emerging market currencies as well as the us dollar and predictions for the coming weeks.

The run up to the us election on november 3 is driving volatility in the foreign exchange forex markets and depending on the outcome could have an impact on several currencies beyond the us dollar. Equities futures and forex markets are all interested in the relative strength of the united states dollar and ultimately that strength is based upon the economic health of the nation as a whole.