What impact did the U.S. presidential election have on the U.S. dollar and the currency markets/exchange...

What impact did the U.S. presidential election have on the U.S. dollar and the currency markets/exchange rates and why?

Expert Solution

The U.S dollar has significant role in global economy so that the presidential election or any changes in US goverment structure,politics or constition will create drastic impact in global economy.The presidential election is a one of the main event in US so defenitily which has major role global economy.The presidential election of US create stagnant the currency market/exchange for a while.to describe this detailedly developed a theory that is "presidential election cycle theory."This theory describe the correlation between the result of U.S. presidential elections and the valuation of equities is the In basic terms,it is belief that stock market trends can be predicted by the four-year presidential cycle. The theory was developed by market historian Yale Hirsch in2004.

During the election hours political parties make propsal regarding the over all development of the social and economic sectors in the country.because they are wellknown about the global impact of US dollar.so that their oromises has power to change the expectation on world wide.Democratic and Republican parties are major party exist in US.

Fiscal conservatism is the main proposal of the Republican Party, with this they proposed monetary policy centered on national debt reduction and job creation within the private sector. Besides this they propsed business-friendly legislation, lower taxation and a tightening of government spending.On the other hand, Democratic party make proposal with monetary policy objectives centered on public sector job creation and increased governmental spending.with the support for legislation concerning issues such as universal health care, education entitlements and extensive public works projects can all be attributed to Democratic governmental policy. Totally the presidential election is how much unpredictable at the same as the currency market will be unpredictable with election.The expectation of investors and traders completely depends upon the proposal of parties and electoin outcome atleast for a short period of time.To summarise the US election has significant and crucial role in the US Dollar,currency market /exchange market.

Rahul Sunny answered 2 years ago

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