As the 2024 US presidential elections draw closer, volatility and uncertainty around how the results could affect currency trading markets is rising.
Eurotrader analyzes potential currency market movements based on the two likely scenarios on election night – a Republican or Democratic win.
If President Trump wins re-election, the initial reaction would likely be a surge in stock futures, relative strength for the dollar and falling gold prices on perception of continued deregulation and corporate tax policies.
However, lingering concerns around factors like expanding budget deficits, trade protectionism with China could weaken longer term confidence.
This may limit potential gains for the USD index.
Conversely, election of a Democratic candidate could prompt declines for US equities and dollar index with monies shifting toward safe havens like Gold and Japanese Yen. But it’s worth noting that initial volatility and risk-off flows tend to stabilize relatively quicker under a Democrat expansion of social spending. The USD could also find support long term if proposed infrastructure and employment gains manifest.
With a deeply polarized electorate, result uncertainty extending from election night through end of year can make dollar-based currency pairs like EUR/USD, GBP/USD volatile. Eurotrader will be on ground election night into early 2021 guiding traders to hedge risks and leverage opportunities across currencies and assets amidst political turbulence in Americas’ largest economy.