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How the US election could affect the dollar

NJust a few days until the election of the President of the United States of America. Reason enough to take a look at the dollar, America’s figurehead in the business world and still the most important reserve currency in the world. “Our currency, but your problem,” was what John Connally, Treasury Secretary under President Nixon, called the dollar in 1971. For about half a year now, the dollar has been hit hard, and the question arises whether the election could change that. The exchange rate has fallen almost 8 percent against the euro in the past six months, and losses against a basket of major currencies are 6.9 percent.

Is it likely that the dollar will jump in the air if Donald Trump is voted out, or will he give way in the course of anti-democratic malaise if challenger Joe Biden wins the race? The foreign exchange market experts in the banks try to save themselves on the safe side in the tried and tested analyst manner: In any case, uncertainty is something that the markets never want, they say. So if Trump were to lose and actually not voluntarily vacate the White House, that would be very bad for the dollar. If there were long discussions about postal voters and possible electoral fraud, this could put a strain on the exchange rate. Not to mention a situation that deserves the term “chaos”.

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