If Biden wins, that will mark a bottom in the dollar.

Look at history. Since President Reagan, Republicans have been mercantilist and punish the dollar to benefit the big asset owners and exporters (of both goods and jobs). The dollar has firmed under Democrats who try to preserve the purchasing power of the broader public. If Joe Biden becomes President, expect a bottom in the dollar relatively quickly and for it to be range bound with an upward bias during his Presidency. Due to fiscal programs and better trade relations with allies, we'd see higher growth rates and a slight widening of the middle class again.

Should President Trump win, expect the dollar to get pummeled, for inflation to rise and for growth to stay flat. Under a second Trump term, I'd expect a period of stagflationary recession that could last for years. Frankly, I believe the next impeachment attempt would be successful as frustrated Republicans roll over on Trump.

Place your currency bets accordingly in coming months. The election matters.

Comment:

The dollar is now entering a support zone. No doubt it can head to the bottom of the support zone as there are many on that side of the trade. However, all those people talking dollar doom always prove to be wrong intermediate and long-term. Look for a pivot point somewhere in the green box. The Biden Presidency will seek stability. By the end of his term, the dollar will rally again. However, given he is likely a one term President, there will be jitters by year 4 again.