US Dollar Weak No Matter the President

With the Trump presidency, the US dollar continued to see weakness, as tax cuts, growing deficit and interest rate cuts from the Federal Reserve continued to weaken the power of the US dollar. However, even if Biden were to become the next president, the dollar is not likely to become stronger.

There will likely be more stimulus for consumers and small businesses because of the Covid-19 pandemic, as the Democrats have been seeking it this year. Therefore, the spending will continue to show weakness in the dollar. Assuming that Biden manages to undo some of the tax cuts, the government spending would only be slightly balanced.

That being said, some are hopeful for more normal trade policies should Biden become the president which could help boost the power of the US dollar, as Trump’s trade policies made many enemies.

The US dollar Index tracks the dollar against the euro, British pound, Japanese yen, and other global currencies. It has seen 7% decline in its purchasing power since 2017. Of course, weaker dollar allows the big tech companies and multinational firms to grow, as it makes goods and services less expensive in foreign markets.

Most expect the dollar to continue to show stabilization, regardless of the president, as the real issue behind the currency is more Covid-related than the president in 2020.

Coree ILBO/CoreeDaily.com copyright (c) 2013-2020, All rights reserved.

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