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President Joe Biden’s Presidency Revisited – How the President’s Decisions Have Affected the Value of The Dollar

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President Joe Biden

President Joe Biden was inaugurated in a period that was certainly turbulent and uncertain. His presidency began amidst concerns about the future of America, during the COVID-19 pandemic, and after Donald Trump’s presidency. Just two weeks prior to his inauguration, the US Capitol was hit by a domestic terrorist attack led by Trump supporters, sparking concern about future security threats and the acceptance of the new president.

Elections and inaugurations often have a negative effect on the value of the dollar, because of the fact that currencies are directly impacted by the economic health of a country. With the introduction of new economic policies and the general uncertainty about the future of the US under the new president, the dollar experienced a short-term decline in the days prior to Biden’s inauguration.

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However, with Biden’s fulfilment of his promise to vaccinate 100 million people in his first 100 days in office, and the subsequent easing of restrictions, the future of the US economy under the new president looks bright. There have been some significant changes since Biden’s inauguration and according to Ballotpedia:

“As of September 17, 2021, President Joe Biden… had signed 62 executive orders, 37 presidential memoranda, 122 proclamations, and 23 notices.”

Now that we’re heading into the fourth quarter of 2021, we’ve decided to take a look at Biden’s presidency so far, to see how his successes and failures have impacted the value of the dollar.

President Joe Biden’s vaccination campaign

As we previously mentioned, Biden promised that his first 100 days in office would oversee a heroic vaccination effort, administering 100 million doses of the vaccine. However, this figure was doubled. Over 200 million vaccinations were distributed in 100 days, which was a welcome push for the Biden administration, as combatting coronavirus was a definitive aspect of the president’s election campaign.

The US has been the worst affected country by a coronavirus, recording the highest infection rates. As the world’s leader in coronavirus cases, the country experienced its worst economic downfall since The Great Depression in the early 20th century.

The US Gross Domestic Product (GDP) declined at a 32.9% annualised rate, which was the sharpest fall since records first began in 1947. In addition, in July 2021, 30.2 million Americans were unemployed, with tens of millions of US workers losing their jobs as a result of the coronavirus pandemic.

On the other hand, the successful vaccine rollout sparked optimism in the financial markets, because it meant that the US could begin to ease restrictions, return to normality, and build economic momentum. The foreign exchange (forex) market was no exception, and many currencies were strengthened by the success of vaccination programmes worldwide, including the dollar — which was great news for those participating in online forex trading.

Biden’s costly plans

One of the most substantial proposals that President Joe Biden has introduced is a $2 trillion plan to transform the US economy, investing in the nation’s infrastructure to improve roads and water supplies, along with a host of other projects to improve the lives of American citizens. This would see jobs arise for many workers, which could boost the US economy and the dollar in the short term. This plan is also part of Biden’s plight to tackle climate change since it will see the US shift towards cleaner energy sources that will reduce emissions.

This spending plan is colossal and would be spread over an eight-year period, with tax increases being put in place to support the cost of the projects. Biden has already administered over $4 trillion in economic relief to help US citizens to cope with the effects of the coronavirus pandemic, and it would seem that the president is not afraid to spend large amounts in order to support the economy. However, experts have suggested that whilst this could have positive economic effects in the short term, US debt-to-GDP levels are likely to increase significantly in the long term, which could cause the dollar to decline.

Related: American Media Outlets Declare Joe Biden 46th President

The forex market is extremely volatile and reactive to economic changes and unprecedented events, like the COVID-19 pandemic. Elections and presidential changes also can have a direct impact on the value of a currency because of the economic uncertainty that they spark. As a result, you may want to use an online, contracts for difference (CFD) trading platform, to enable you to speculate on price movements in the forex market, and employ risk management tools to protect your capital.

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