At the beginning of November 2020, presidential elections should take place in the United States of America, where Donald Tramp, as representative of the Republican Party and Joe Biden, as representative of the Democratic Party would confront as presidential candidates. Uncertain is the victory of any of these candidates at the elections and the outcome of it would have mayor impact over the financial markets in the world.
Usually the elections have positive impact over the USA economy, but this time the circumstances are different due to the newly occurred situation with the Corona virus pandemic. Therefore, the US Dollar may be noted as the most affected from all the other currencies, which largely depends on the developments in the USA economy.
At the beginning of Corona virus pandemic, the US dollar became safe haven currency for investing in the world (together with the Japanese Yen), so the currency pair EUR/USD at mid-March 2020 reached the highest level relative to the EUR (1, 0658), i.e. the April level of 2017, as a consequence of increased demand for US dollars and need for liquidity in this currency. Unlike this period, for the past three months the pair registered the lowest level in the past two years (1.1941), which is an indication of high currency volatility in period of mayor changes and movements at the world markets. An index of US Dollar was reduced by almost 7% for the last quarter, although for the first three months of the year it grew continuously. Having in mind the economic recovery of Europe from the Corona virus pandemic, as well as the manner of dealing with, the introduction of restrictions and relaxation of measures compared to the one of USA, it is concluded that it has contributed to a weaker USD relative to the EUR. Continue reading “Presidential elections in the USA and consequences over change of value of the US Dollar- magazine Economy and Business”