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US Election: how would Democratic and Republican victories impact the US dollar?
29-10-2020 | treasuryXL | XE |
Regardless of the winner, there will be motion in the currency markets. Are you prepared?
In just one week, the 2020 United States presidential election will draw to a close.
While many are making their predictions based on recent polling data, as time has shown (just look at the 2016 election), the polls are not definite, and the United States could conceivably see a victory for either Biden or Trump.
Whatever the result of the election may be, it will likely cause movement in the currency markets, and lead to changes in the value of the US dollar (and potentially other world currencies as well).
Volatility in the currency markets can dramatically impact individuals and businesses alike. Are you prepared for what could happen?
How will a Biden win affect the dollar?
In our previous post on the topic, here’s what we had to say:
Even today, you’ll see conflicting forecasts regarding a Biden victory. Some maintain that a Biden victory will lead to a drop in the dollar’s value. Earlier this month, the dollar fell to a nearly three-week low (its second straight week of downward motion), with many attributing its drop to increasing expectations of a Biden victory. Others believe that the greater uncertainty toward the Biden administration’s attitude toward the dollar may result in greater volatility.
However, others have stated that a Biden victory would be the “best possible outcome” for the dollar seeing as, between 1980 and 2016 (but excluding the 1984 and 2008 elections), the dollar rose an average of 4% following Democratic victory, as opposed to the average 2% jumps when Republicans were victorious. Additionally, many investors are reducing their bets on extreme currency market volatility in the event of a Biden victory.
What will happen to the Dollar if Trump wins?
After Trump’s victory in the 2016 election, the dollar did rise, and some predict that it will do so again. However, the US dollar Index has dropped more than 7% since his inauguration in 2017. Yet on the other hand, as stated above, the dollar does tend to strengthen immediately following a US presidential election, regardless of who wins (in fact, only 1 of the 10 elections since 1980 saw a drop). Many still predict a stronger dollar following a Trump victory, due to the administration’s support for fiscal stimulus as well as the fact that there would be less uncertainty in reelecting Trump over electing a new president.
What else?
Due to the much higher-than-usual frequency of mail-in ballots and early voting during this particular election, it’s possible that the winner will not be announced on Tuesday November 3, and will be delayed by a few days or more. A delayed announcement or a contested winner would extend the period of uncertainty, and almost certainly lead to a fall for the dollar.
Get in touch with XE.com
About XE.com
XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.
Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.
Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.
Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.
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Appropriate funding, where do you get it? (Dutch item)
| 26-10-2020 | Stichting MKB Financiering | treasuryXL
Uit het onderzoek naar de ontwikkeling van de zakelijke non-bancaire financiering in Nederland dat SMF in juni publiceerde bleek dat de omvang van de non bancaire financiering (€ 2,6 miljard) zó groot is geworden dat niet meer gesproken wordt van alternatieve financiering, maar van non-bancaire financiering. De groei vindt plaats in alle delen van de financieringsmarkt van het MKB (zowel de kleine financieringen als ook de grotere miljoenenverstrekkingen). Tevens werd geconstateerd dat met name bij de financieringsvolumes tot € 1 miljoen het volume van de bancaire financieringen jaarlijks afneemt versus een toename van non-bancaire verstrekkers. De non-bancaire financiers nemen de financieringsrol van de banken in dat segment langzaam maar zeker over.
Het aanbod van financiering is groot en divers geworden, waardoor het voor ondernemers niet altijd duidelijk is waar zij het beste een financiering kunnen aanvragen. De rol van gespecialiseerde financieringsadviseurs wordt in deze markt belangrijker. Zij kunnen de MKB ondernemer begeleiden in hun zoektocht naar financiering. In eerder gepubliceerde blogs hebben wij de verschillende aanbieders van financiering besproken. Onderstaand is een samenvattend overzicht, verdeeld over 4 groepen, opgenomen. Tenslotte is een tabel toegevoegd: dit geeft antwoord op de vraag welke aanbieders gespecialiseerd zijn in welke obligo’s (omvang van bedragen).
Voor het overzicht onderscheiden wij 4 hoofdgroepen van geldverstrekkers:
1. Non-bancaire geldverstrekkers
Hieronder rekenen wij de financiers die onderwerp waren van het onderzoek van SMF:
2. Keten- en transactie financieringen
Hieronder vallen allerlei (creatieve) financieringsoplossingen die partijen in de keten, binnen hun transacties, met elkaar overeenkomen.
3. Eigen netwerk
Ook het eigen netwerk kan een heel creatieve bron van financiering zijn. Onder deze categorie scharen wij
4. Overige traditionele verstrekkers
In bovenstaande categorieën zijn al enkele langer bestaande geldverstrekkers vermeld (zoals factor- en lease maatschappijen). De nog niet genoemde traditionele verstrekkers zijn
Wie is jouw financieringspecialist?
Het aanbod van financiering is groot. Door het grote aantal verschillende financiers is het de vraag: Wie is SPECIALIST in welk obligo? Immers, voor een financiering van € 10.000 kun je beter niet aankloppen bij een bank. Voor een financiering van € 10 miljoen moet je niet bij een Kredietunie zijn. In onderstaande tabel hebben wij d.m.v. sterren aangegeven tot welke partijen je het beste kan richten. Hierbij zij opgemerkt dat het een indicatieve indeling betreft.
Aanstal sterren
Blanco : Betreffende geldverstrekker richt zich niet of niet primair op deze obligo’s
∗ : Binnen de groep van deze geldverstrekkers zijn er (enkele) financiers te vinden die betreffende obligo’s verstrekken.
∗∗ : deze obligo’s vormen een belangrijke groep voor deze verstrekker
∗∗∗ : In deze obligo’s is de betreffende geldverstrekker een specialist
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Er zijn platforms die zich beperken tot € 50.000,
er zijn platform die starten vanaf € 500.000.
Per categorie zijn er specialisten
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Ga voor minimaal 3 sterren
Dit overzicht sluit aan bij de gesignaleerde trend in de markt: de non-bancaire financiers zijn op dit moment in toenemende mate de specialisten voor financieringen tot € 1 miljoen en zij spelen in het segment tussen € 1 en € 2,5 miljoen een steeds belangrijkere rol. In de grotere financieringsvolumes spelen de banken vooralsnog een dominante rol.
Ben je dus op zoek naar passende financiering check het bovenstaande schema en ga dan minimaal voor 3 sterren!
www.stichtingmkbfinanciering.nl
Bron
The US Election, the Dollar, and the Pound: what’s the forecast?
22-10-2020 | treasuryXL | XE |
Currently both election polls and the betting odds predict a clear lead for Joe Biden. However, it is important to cast your mind back to the night before the 2016 election when the same polls and odds had had Hillary Clinton as the clear favourite.
The United States presidential election is just over a few weeks away. For the US citizens, these last few weeks leading up to Election Day are going to be a whirlwind.
One of the areas that this election could have a major impact is on the value of the US Dollar. Earlier events this year such as the coronavirus pandemic have already led to fluctuations in the dollar’s value, and the election of a new president—and all that comes with it—could potentially lead to more.
What’s the forecast?
Currently both election polls and the betting odds predict a clear lead for Joe Biden. However, it is important to cast your mind back to the night before the 2016 election when the same polls and odds had had Hillary Clinton as the clear favourite.
The currency markets will have priced in a Biden victory to a certain extent, and therefore should Biden manage to displace the current president we could see a relatively muted reaction. If Donald Trump manages to hold onto the White House we could expect to see a
significant unwinding of positions that were based on an assumed Biden victory.
Traditional wisdom would dictate that a Biden victory could lead to huge spending and tax increases which could see the Dollar weaken further, however many now believe that a safe and stable pair of hands for the US recovery from the COVID pandemic may just be the thing the Dollar needs to rebound.
Looking at levels, the below Reuters FX Poll shows that markets are expecting the Pound to hold steady with a weakening US Dollar showing smart money targeting a level of 1.3000 at year ending climbing to 1.3400 by mid 2021.
How should businesses respond?
Nobody knows for certain where the markets could go next, and this uncertainty and volatility can have both a negative and positive impact on company bottom line, particularly where there is an exposure to USD.
With expert guidance from Xe, your business can confidently navigate the choppy waters of financial uncertainty.
In today’s volatile foreign exchange markets, we work harder to protect your business from exchange rate fluctuation. Our solutions are designed to take the uncertainty out of global
payments so you can stay focused on running your business.
Market Orders
Flexible with your transfer time? Pick a rate and transfer automatically when the market hits your desired rate.
Forward Contracts
Lock in a rate for future transfers. Transfer anytime at your locked rate within 3 years.
FX Options & Structured FX Products
Bespoke solutions uniquely designed for your business needs, provided by our sister company, HiFM Limited.
FX Risk Management
Currency volatility impacts your business. We deliver a risk management strategy to meet your specific objectives.
Get in touch with XE.com
About XE.com
XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.
Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.
Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.
Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.
Visit XE.com
Visit XE partner page