A Biden victory will likely drive the dollar higher, though that runs counter to what some on Wall Street have begun predicting.
Today, we play a game of “What if.” What if… Joe Biden wins the White House? First, this is not political commentary. It’s an exercise in forward thinking based upon polling that currently shows Biden with a 10-point lead over Donald Trump with a little over a week remaining before the presidential election. No question – polls can be very wrong, as history has proven time and again. And there’s no clarity on how a contested election might actually settle out. But this exercise assumes that the polls are accurate. And if they are, well, what does a Biden administration mean for an investment portfolio? Foremost, a Biden victory will likely drive the dollar higher, though that runs counter to what some on Wall Street have begun predicting. Regardless of what pundits say, the dollar, historically speaking, tends to like Democrats occupying 1600 Pennsylvania Ave. You’ve likely seen this chart before, but it’s worth a replay because it shows that Democratic presidencies have primarily coincided with a stronger dollar, while Republicans have largely overseen dollar weakness. A Biden presidency would likely see reversals on numerous Trump administration policies have helped weaken the dollar – be it the coronavirus response or tariffs that have affected trade.
