CNBC: The Dollar Could Weaken Further Under a Biden Administration, Analysts Say

Article by Weizhen Tan in CNBC financial Network

The U.S. dollar is poised to further weaken, amid market views that geopolitical risks are falling after the election and that the next stimulus package will likely be smaller than expected, according to analysts.

Citi Private Bank strategists predicted a weaker dollar ahead, given that a Biden administration would reduce uncertainty in international trade policy.

“Perhaps the greatest clarity post-election is for global trade. US foreign policy will enter a more predictable phase without escalating tariff threats. We see a declining US dollar, and rising emerging markets as highly likely,” they wrote.

Following projections over the weekend that Joe Biden has won the U.S. presidential election, the dollar continued diving sharply to around 92.162 on Monday.

“What has probably been more of a surprise … post the election result … was the way not only have we seen (the offshore Chinese yuan) and the Asian currencies benefiting … but we’ve seen a much more broader dollar sell off — across all the G10 currencies,” JPMorgan Private Bank’s Adam Margolis told CNBC’s “Street Signs Asia” on Monday. 

“An increasingly bearish picture is unfolding for the U.S. dollar … on signs that Fed money printing rather than government spending may be deployed to bolster the economy,” it said.

A divided Congress — with Republicans controlling the Senate and Democrats holding onto the House — may mean a small stimulus package. That increases pressure on the Fed to ramp up its bond-buying program and other ...

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