Every four years the dilemma is always the same, which is the best for Wall Street? Republicans or Democrats? And the idea prevails that Democrats are not so good, perhaps because of some ideas expressed by their candidates, such as Biden’s intention to raise corporate taxes. But in reality this doubt is an illusion, little or nothing matters the colour of the winner of the elections, because as soon as the tenant settles in the White House, the rhetoric becomes different, namely because he has to deal with the powerful lobbies of the diverse industries, but this duality is of little relevance because the important thing is the economic cycle that the USA goes through when a new president is elected, as well as the question of the domination of Congress, if it exists, if it is from the same party is equally pressing. whether the president or not, these are the details that make all the difference in the progress of the markets in the four years of his term.
Photo by Eric Prouzet.
And likewise, since the currency is strongly related to economic performance, its strength derives more from externality than decisions by the White House, despite, for example, pressure from the President, namely with the central bank, which influence the behaviour of the currency, as Trump has done, which in some phases helped to lower the value of the US Dollar against other currencies of competing economies, such as the Euro and the Yuan. So the question that the investor should ask is who will be the best candidate for the economy, which may not be so much about the next president, but the combination between this and the support or lack of him in Congress, however it is to be predicted that with Trump puts additional pressure on the US currency to remain less strong, given that it has this dynamic as a form of economic policy, as it helps exporting companies.
