Forex Dealers Bet on Biden
The foreign exchange market seems to predict the winner of the US presidential election next month as Democratic candidate Joe Biden. At its center are the Mexican Peso and Russian Ruble.
Bloomberg reported that the Mexican peso, which had weakened after the surprise election of Republican candidate Donald Trump in the 2016 U.S. presidential election, turned to strength. .
As the Democratic Party to which Biden is a member of the Democratic Party is insisting a wider economic stimulus plan than the Republican Party, there is spreading in the foreign exchange market that if Biden is elected, Mexico’s exports to the US will increase.
Reflecting this, the value of the peso has soared more than 8% since July.
On the other hand, the value of the ruble has fallen by nearly 8% since July as the likelihood of the Democratic Party in power increased. Christian Maggio, head of investment strategy for emerging markets at TD Securities, predicted, “If Biden becomes president, it will likely impose sanctions on Russia, suspected of intervening in the last US presidential election.” According to Bloomberg, money manager Sergei Stirigo Amundi, who bought a large number of rubles and sold pesos in 2016, has recently sold the rubles and is buying pesos.
Amundi, an asset management company, manages assets in emerging markets worth 40 billion euros , Bloomberg said. In the three months immediately after the 2016 U.S. presidential election, the value of the peso plummeted by more than 12%, and the value of the ruble soared nearly 7%.
With the emergence of President Trump, emphasizing national preferences, trade conflicts with Mexico were expected, and the peso could not hold back. In fact, President Trump has pushed for re-revision of the North American Free Trade Agreement (NAFTA) and has begun to build barriers on the border with Mexico.
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