A 2020 election win by former Vice President Joe Biden could speed up the U.S. dollar’s decline, according to Goldman Sachs.

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The U.S. dollar has slumped 2.75% this year versus a basket of currencies, according to Dow Jones Market Data, in the wake of unprecedented action taken by both the Federal Reserve and Congress to cushion the economy from its sharpest slowdown of the post-World War II era.

“We continue to see a good case for sustained dollar weakness, reflecting the greenback’s high valuation, deeply negative rates in the U.S., and a recovering global economy (which tends to weigh on the currency because of its unique global role),” wrote a Goldman Sachs team led by Zach Pandl, co-head of global foreign exchange, rates and emerging markets strategy. “A Democrat sweep in the US elections could likely accelerate this trend.”

Biden currently holds a 6.5-point lead in the national polls, according to RealClear Politics, although that margin is at a tighter 3.5 points in key battleground states. The race for control of the Senate is too close to call.

How the markets respond to the election will be determined by three factors: the stance of fiscal policy and the size of the budget deficit, the tax and regulatory environment and foreign policy, according to Pandl.

A so-called blue wave if Biden wins the White House and Democrats picked up a net three seats in the Senate while maintaining control of the House of Representatives would result in “easier fiscal policy and a larger budget deficit” than any of the other outcomes, the Goldman team said.

Biden has proposed reversing at least some of President Trump’s corporate tax cuts, which could weigh on U.S. gross domestic product and make U.S. stocks less attractive to international investors. Goldman research suggests both could impact future foreign exchange returns.

The former vice president has also promised a bevy of regulatory changes to sectors including technology and energy, which Goldman believes would have a similar impact.

Another round of fiscal stimulus at a time when the Federal Reserve has promised to keep interest rates low would put further pressure on the dollar, the firm said.

Biden’s multilateral approach to trade would imply lower trade war risks and reduce risk premiums in currencies like the Chinese yuan, which Goldman sees strengthening to 6.50 per dollar, from 6.80, amid broad weakness in the greenback.

“Other election outcomes would imply less Dollar weakness,” Pandl wrote.

Marc Chandler, chief market strategist at the trading firm Bannockburn Global Forex, agrees the dollar is headed lower no matter who wins the election.

He believes the dollar is just starting a long-term downtrend and that it will approach its 2008 low of 1.60 per euro.

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“Next year the new meme is going to be a return to the twin deficits, large budget deficit and large current account deficit,” he told FOX Business.

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