Citigroup Strategists Warn of Continued US Dollar Downfall if Biden Becomes President

The US dollar will likely its weakening trend following the US presidential election, while US foreign policy will become more clear and predictable, Citi Private Bank strategists anticipate.

According to a note written by the bank’s chief investment strategist David Bailin and chief economist Steven Wieting and later obtained by CNBC, a victorious outcome for President Elect Joe Biden will mean that America will return to a more conventional form of governance, followed by a significant divergence from Trump’s style of foreign policy. The strategists anticipate that alliance building between countries will once again emerge, while aggressive negotiations via tariffs will likely subside.

Once the outcome of the presidential election becomes finalized and the new administration takes control of foreign policy, the world’s financial markets stand to benefit, especially in emerging markets. The post-election era will bring with it more clarity and predictability absent of tariff threats regarding not only foreign policy, but global trade as well. The strategists also noted that the US dollar will begin to decline, while emerging markets will experience growth.

The US dollar index, which tracks America’s currency against a basket comprised of its peers, dropped to 92.456 last Friday – the lowest level seen since September 2. Then on Monday, the dollar continued to fall sharply to approximately 92.162, following the weekend’s anticipation that Biden will likely win the US election. In the meantime, Asian currencies began to rise over the last several days, as the offshore Chinese yuan reached a 28-month peak on Monday and appreciated to 6.61 against the US dollar.

Information for this briefing was found via CNBC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.