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Will Donald Trump make Forex industry great again?
16/03/2017
Will Donald Trump make Forex industry great again?

Will Donald Trump make Forex industry great again? Some experts believe that the new acting President of the US can do good for the Forex sector.

AtoZForex The new acting President of the US, Donald Trump has been a conflicting person so far. During his Presidential campaign, Mr. Trump has promised tax cuts to wealthy, while still wooing the working people that have lost their jobs.

Will Donald Trump make Forex industry great again?

Moreover, online reports state that Donald Trump’s economic plan’s number do not add up. Also, his inconsistent behavior makes him an unpredictable leader. As a fact, Mr. Trump once stated that unpredictability is a great negotiation tool.

While his approach to the policies can be a little disorganized, there are some benefits of having him as a President of the US. Especially, Forex industry is in favor. We present to you three reasons why Trump can make Forex industry great again.

Looser regulations

Some believe that actually loosing the regulations a little will do good for the Forex industry. Donald Trump’s Party now is administering both the House and the Senate. This implies that they could possibly pass a few laws that were approved before Trump took over the Oval Office. One of such laws – regulation of Dodd-Frank that was designed specifically for the financial crisis.

As a fact, less regulation has already boosted the financial services stocks in the US. Additionally, it could lead to more activity in the market and also in the small US Forex industry.

The Forex sector has been squeezing lately, and it is a high time it gets a little freedom. In general, looser regulation could positively impact the industry. Specifically, the easing limits on leverage, permitting firms with lower capital to participate and getting rid of other barriers for Forex brokers and traders would help the industry grow.

Higher Volatility

During the election night in November 2016 and the days after we saw huge volatility in the markets. Initially, the GBPUSD advanced then slipped and then spiked again to the new highs. Moreover, this is not the only pair that saw crazy moves that time.

Also, some experts believe that such volatility may continue. As I mentioned before, Mr. Trump is known for his unpredictability. Thus, his behavior could cause drastic moves in the market. The big shifts in the value of currencies can be caused by his administration or by the Federal Reserve. The latter could even provide more confusing guidance to the markets.

Bubbles

The last, but not the least, Donald Trump wants to lower the taxes and increase the fiscal spending on infrastructure. The behavior of the bond yields in the wake of the election largely mirrors this stance. Moreover, it reflects higher growth and inflation, thus justifying higher interest rates.

Everyone is seeking stronger growth after long years of economic sluggishness. Moreover, nobody wants a recession. A quick expansion rate now could lead to a bubble. This bubble would in inflation, with higher prices due to the government spending and lower taxes. Additionally, there is an opportunity for other bubbles to grow. Just think of the financial bubble, in case the regulation will get loose.

And, of course, after big bubble will burst – big bust will start.

As it is largely known, it is the best time for Forex brokers and traders. However it may sound, the busts results in higher volatility. Moreover, they mean that investment in stocks becomes less attractive than trading currencies.

Will Donald Trump make Forex industry great again? Think we missed something? Share you thoughts with us in the comments section below.

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