We have repeatedly written and mentioned the future election of the US President in November 2020. How much does it affect the US currency right now? Low. However, this is a fundamental background. Such topics have a long-term impact on the currency market, on the mood of traders and investors. Thus, topics like the US-China trade conflict, the US elections, and the coronavirus should not be overlooked in any case. At this time, according to the latest conducted social studies, Joseph Biden is leading in the election race. At the same time, this is evidenced by the results of independent opinion polls, and the results of research by Republicans and Democrats. The numbers themselves are only slightly different. So according to various data, Biden is ahead of US President Donald Trump from 6% to 10%. The balance of power may change more than once over the next few months. Six percent is not a big margin. However, from our point of view, the main problem of Trump is something else: Joe Biden did almost nothing to become a leader. If the American president gives several interviews every day, speaks at briefings, has started traveling around the country with campaign rallies, and his Twitter account is full of messages, then Biden rarely gives interviews and comments on anything. Trump regularly criticizes and openly insults his opponent, doubts that he is able to pass an IQ test and calls him "sleepy Joe", while Biden rarely pays attention to Trump. Moreover, now that the coronavirus epidemic is still raging in the country, Biden is in his residence and rarely appears in public. On the one hand, it is understandable since the presidential candidate is 77 years old, and it is known that people of this age are at high risk. However, Trump is not young, but this does not prevent him from traveling around the country and fundamentally not wearing a protective mask. All this makes it clear to the American population that Biden is much more serious about the epidemic, and one of his last speeches, recorded on video, is just dedicated to criticizing Trump in matters of governing the country in difficult times and opposing the coronavirus.
However, let's return to the topic of election campaigns. Many experts and political analysts note that Biden's position looks much more attractive than Trump's. However, Biden also has its disadvantages. First, is his age at 77 years and since the presidential term is long, this means that when it comes to an end Biden will be 81 years old. Many people doubt whether a person at this age can lead a country with the largest economy in the world. Especially since Biden has repeatedly made blunders on air in the past. However, on this issue, he is unlikely to lose to Trump, who does not consider himself old, and produces much more blunders. Second, the American electoral system is designed so that you do not necessarily need to get more votes than the opponent. It is enough to win in the largest number of so - called disputed states - states where the electorate doubts who to give their vote to. Experts also note that if Trump's political ratings are "near the plinth" now, then they can grow by November, if the economy begins to recover, unemployment falls, and the coronavirus will be able to win. Of course, we do not think that everything will be so easy and simple. After all, it is unlikely to significantly boost the economy and localize the coronavirus at the same time in three months. These two concepts counteract each other. Trump opened the economy, completed the lockdown and immediately got the second wave of the pandemic, although we consider it the first, which did not end.
At the same time, sociologists note that over the past four years, a new group of young voters have appeared in the country who do not support Trump, preferring Biden over him. Trump was not supported by young people in 2016 either. In addition, voters are extremely reluctant to vote for those rulers during whose time there were financial crises, epidemics, natural disasters, etc., although objectively they are hardly to blame for them. As for the foreign exchange and stock markets, the outcome of the elections can have a rather strong effect on them. According to experts, in the event of the Democrats' victory, periods of high volatility may begin in both markets, as many investors will begin to sell assets or transfer them to the safest, for fear of raising various direct and indirect capital taxes. No less important will be the issue of interaction between the new government and the Federal Reserve. Formally, the US central bank is not subject to Congress or the president. Nevertheless, many economists agree that Trump managed to find leverage over the Fed and personally US central bank Governor Jerome Powell. We all remember Powell's unexpected calls to the White House a year ago, the regular criticism of the Fed's head for high stakes, which ultimately led to a fall in stakes almost to zero, although not without the help of the epidemic. Experts also note that the Fed during the time of the coronavirus crisis behaved much more actively than in the crisis of 2008-2009. It is unknown how the Fed will be configured if Biden becomes president.
Our opinion remains the same. We believe that Trump has a chance of winning the election, but they will depend solely on the various tricks of the Trump team. It is possible that there will be attempts of foul play, attempts to block the results of voting in the states where Trump will lose, attempts to accuse of fraud in the same states, attempts to close certain states, cities or districts to quarantine in order to influence the outcome of the election. In general, we expect anything from Trump, but not fair and open elections, although, of course, we do not dare accuse the American president of anything like this. As we have mentioned many times, you need facts and evidence in order to bring charges. Thus, in fact, only one question remains open: will the Trump team be able to bypass Biden, who in principle understands quite clearly what can be expected from the current president and, accordingly, should prepare for this, or not?
Trading recommendations for the EUR/USD pair:
The technical picture of the EUR/USD pair shows that the price continues to trade with a low upward slope inside the side channel, limited by levels of 1.1200-1.1350. Thus, consolidating the euro/dollar pair above 1.1350 is still required in forming an upward trend. At the same time, the euro has no fundamental support now, so the prospects for the euro depend more on what is happening in the United States and the demand for greenback.
