The Forex Market is the most active and turbulent financial market worldwide. Traders take part in the trillions worth of foreign exchange transactions every day. Events from all corners of the world can have immediate consequences on exchange rates and currency values, because of the global interconnectedness of the forex market. Some events that have transpired in 2020 are set to have especially large consequences in 2021, though.
The U.S. Presidential Election
Politicians dubbed the 2020 U.S. presidential election as the most important election of last decades. After lots of debates and uncertainty, Joe Biden won over current President Donald Trump. They had different visions of various topics.
Considering that difference, the ideological shift that occurred has the potential to evoke greater volatility in the U.S.’ currency. Biden’s commitment toward net-zero carbon emissions by 2050 will impact the U.S. Fracking and Fossil Fuels industry, and it will most likely affect several markets as well. Analysts think that Biden’s new environmental conscious reforms will reduce economic growth for at least a short period of time.
New U.S. Stimulus Package
U.S. Democrats and Republicans reached an agreement for the relief bill of 900 billion at last. It comes after the $2 trillion Cares Act that Congress approved in March 2020. Eligible persons will receive direct stimuli payments of $600, which is half the amount provided in the first stimulus round.
Furthermore, the Paycheck Protection Program will reopen. It will target some of the hardest-hit small businesses. Many U.S. leaders think that the new bill is a vital step to a larger relief package in 2021, though.
The fresh stimulus package aims to provide real support for the economy, but its announcement failed to become a major bullish catalyst for stocks.
Many analysts think the forex market will see more volatility in the months to come. So, traders should ensure they stay up to date with all current affairs.
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