63.21 % of retail investors lose their capital when trading CFDs with this provider.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63.21 % of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Academy News Biden's win could boost Asian currencies

Biden's win could boost Asian currencies

The presidential election in the United States is approaching. In the next few weeks, the current president Donald Trump will fight for the post of the most powerful man on the planet with his democratic counterpart Joe Biden. Both presidents have a different vision and approach towards the future of the United States and their policies might affect not only US markets but also those of Asia and Europe. And it’s some of the Asian countries that currently have unhealthy relations with the US due to Trump, and should Biden come to power, he will try to change that. 
 

Return to international agreements

In the past, Biden reiterated his sympathy towards the countries in the Asian region and towards international agreements that were repealed by Trump. Immediately after taking office, Trump withdrew US membership in the Trans-Pacific Partnership (TPP), a multilateral regional free trade and cooperation agreement between member states. So far, it includes Japan, Brunei, Malaysia, Vietnam, Singapore, Australia, New Zealand, Canada, Mexico, Chile and Peru. The election of Biden could be supported by the covid-19 vaccine, which would support economic recovery worldwide and also in high-risk areas. 

Under Biden's leadership, US foreign policy will be much more predictable. According to UBS, most Asian currencies could strengthen by 3-4% against the dollar. A Thai baht, currency that is currently under pressure due to the limited travel, could strengthen significantly. That is why Biden’s win would be an ideal combination with the advent of the vaccine. Because Trump's win would not help Asian currencies that much, but the vaccine alone would support currencies by 1-2%. The Chinese yuan is a whole different story, as it cannot be expected that Biden would want to continue the trade war in China and a new team of negotiators would take place at the negotiating table under the Biden administration.


Chart: Weekly USDSGD (Source: cTrader PurpleTrading)

usdsgd

Growth of Asian stocks

Biden's victory would help not only Asian currencies but also Asian stocks. Recently, the Trump administration ordered US pension funds to suspend their investments in Chinese stocks. Tensions between the two countries during the pandemic, therefore, intensified even more. However, Trump's ferocity may be missed, as he himself has repeatedly pointed out the to the unfair conduct of China and other Asian countries, which he has tried to fight so far.
 

Chart: Current development of main asian currencies (Source: Bloomberg.com)

 

Disclaimer: Any opinions, reports, research, analyzes, prices, or other information contained in this material are provided as general marketing communications for informational purposes only and do not constitute investment advice. Nothing in this notice contains an investment recommendation or incentive to buy and sell any financial instrument. All information provided is collected from reputable sources and any information containing past performance information is not a guarantee or reliable indicator of future performance. We do not accept any liability for any losses resulting from any investment made on the basis of the information provided in this communication. This communication may not be reproduced or further distributed without our prior written consent.

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63.21 % of retail investors lose their capital when trading CFDs with this provider.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63.21 % of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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