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Investing.com – There is no doubt a violent and strong storm that could amount to a hurricane stronger than the delta and the tsunami … it is the US election that billions of people on the planet are waiting for.
The biggest and most influential event right now is matched only by the second wave that started to appear from the Corona virus.
Between the markets supporting Trump’s victory or leaning toward Democrat Blue Biden, the dollar and the dollar find themselves face to face in the test of stress and stress that chooses investors during these difficult times.
It seems the response was swift as everyone was hanging on and hanging on to the yellow metal, while investors gave up their bet, even temporarily, on the dollar, which waited and still awaits a stimulus package. It looks like it won’t see the light of day until the U.S. election, but will wait until early 2021.
gold
Gold prices rose globally on Friday as trades were settled, with losses on the currency and US stocks.
The December delivery price rose 0.6% to $ 1,879.90 per ounce.
During Monday’s session, gold rose more than $ 13, rising 0.8% to levels of $ 1897 an ounce.
And futures on the yellow metal for December delivery rose to levels of $ 1,886, up $ 9.
Dollar
In contrast, the dollar fell during today’s and Friday trading hours, hours before the US election and after statements about the postponement of the stimulus package after the presidential election.
During today’s trading, it fell 0.1% by 8:30 p.m. EST to $ 94.
The dollar fell against 0.3% to 1.164, fell against the yen 0.02% to $ 104.65, and fell against the pound 0.12% to $ 1.2935.
On Tuesday morning, Americans will begin the voting process to elect the President of the United States of America, between the Republican candidate and incumbent President Donald Trump, and the Democratic candidate, Joe Biden.
Goldman Sachs (NYSE 🙂 says the US dollar could fall 15% by the end of 2023, and the blow will likely be stronger.
The investment bank’s note came after a grueling week in global markets ahead of the U.S. election tomorrow, Tuesday, and the world has closed its doors, and the features of a deal on any stimulus package ahead. the presidential elections have faded.
Zach Pandal of GlobalFX says there are many reasons for the depreciation of the US dollar, and we believe it is overvalued between 10% and 15%.
With real interest rates remaining negative in the United States and a strong economic recovery, conditions will be similar to a weaker US dollar.
The reasons for the falling US dollar are due to the following reasons:
The course of the epidemic, vaccine developments, election results and the limited schedule for the US election.
Investors are reluctant to embrace the idea of ​​a lower dollar until the end of the year and into 2021, with growing uncertainty about the U.S. election, the health of the global economy and the performance of the US economy compared to other markets. Few investors are focusing on the weak dollar in the coming months.
Pandal said that the results of the US election will not change his view on the trajectory of the US dollar, but that it could accelerate the path, for example if the Democratic Party wins, the dollar will fall quickly.
If the American people elect former Vice President Joe Biden, they will pursue different foreign policies, especially when it comes to Sino-U.S. Relations, which could increase strength against the U.S. dollar.
Democrats will also endorse strong stimulus packages, if the vision of the “blue wave” comes to fruition, increasing dollar weakness. The dollar may also weaken to increase investment demand to finance the US budget deficit, especially if the Federal Reserve keeps interest rates low.
If Trump is re-elected, the dollar will eventually weaken, as attention turns to the Corona outbreak.
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