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What About UAE Currency if Trump Win the Elections?


The UAE and GCC markets could see a strengthening of the US dollar if US President Donald Trump wins this week’s election.

They believe the US dollar will be subject to two to five percent volatility as a result of the polls. A Joe Biden win, on the other hand, would weaken the US currency.

Since the UAE dirham is pegged to the dollar, any movement of the dollar is directly reflected in the Emirati currency.

Vijay Valecha, Century Financial’s chief investment officer, said that with Trump, the US administration has developed much closer ties with the United Arab Emirates and Saudi Arabia.

“So, in the event of Trump’s victory, the UAE and Saudi Arabian markets are expected to hold their position and even strengthen it, further consolidating their relationship. For the coming week, however, the GCC markets are more likely to react negatively to the current course in energy markets, “he added.” In the event of a full democratic victory in the presidency and the Senate, the UAE and GCC markets are likely to be positively affected. Direction of the dollar?

Valecha said Biden’s election to the presidency of the United States would likely mean a further increase in the fiscal deficit, and this massive government spending will likely be financed through increased US Treasury debt issuance. “This will increasingly affect the overall dollar trend with large fiscal deficit numbers likely to be negative credit for US sovereign debt.”

Rajiv Raipancholia, CEO of Orient Exchange, said that if Trump wins the election, there are more signs of a strengthening US dollar.

“Interest rates are expected to rise and if that happens deposits in the US economy will rise to take advantage of the higher yields. Furthermore, the ongoing trade conflict with China and the tariffs imposed would encourage a stronger US dollar. The republican party aims to reduce national debt and keep taxes low with a greater effect on the dollar. “

“If Biden wins the election, we could see a weaker dollar. There are strong signs towards a fiscal stimulus package aimed at increasing public sector jobs and public spending. When that happens, interest rates are reduced, thus leading to a bearish dollar, “Raipancholia added.” However, two to five percent movement is expected after the elections in both directions.

Edited by IICUAE on source

Khaleej Times