Being the president of the world’s largest economy, Donald Trump is considered to be the most influential person when it comes to financial markets. Whatever policy changes were taken by Trump Administration during the last two months has had substantial effects on the equity and Forex currency markets. Trump promised during his campaign to increase infrastructure spending, introduce tax reforms and to slash regulations that were killing jobs. He wants to boost production in the US through tax subsidies for local businesses and increase consumerism. Forex market analysts have argued that Trump’s pro-growth policies will be a key driver for volatility in global FX markets going forward.
Trump’s disruptive immigration policies like the temporary travel ban imposed on Seven Muslim majority nations and his controversial comments on social media have put global equity and FX markets in a tailspin. For example, his comments about the withdrawal of US from the Trans-Pacific Partnership caused a huge impact on many of the Asian currencies like CNY and JPY. Since US Dollar is considered the global reserve currency, any changes in Fed policy like interest rate hike or tax reforms will have a notable impact on major currencies like EUR, GBP, CNY, CAD and JPY. The most affected currencies due to Trump’s policy changes are of the emerging markets such as Mexican peso, Turkish lira and South African rand. Trump’s controversial tweets targeting various Corporates or entire nations have impacted major currencies in a big way. Trump’s Twitter account has more than 18.8 million followers and is a major driving factor for investor sentiments across the globe. The below table illustrates the Trump effect on major currencies between US elections held on Nov 8th, 2016 and Jan 5th, 2017.
|Currency||% Change (vs. USD)|
The US Dollar index enjoyed substantial rally since Trump’s surprise victory in November elections and reached its 14-year high of 103.820 on Jan 3. The notable surge in US dollar was mainly due to the protectionist growth policies of the new President. But the greenback dipped by 3 per cent from its January 3 high after Trump raised a red flag over a strong dollar to the Wall Street Journal. He felt that Dollar was “too strong” for US companies to compete in global trade with their Chinese counterparts. He also blamed countries like China, Japan and Germany for manipulating currencies to get a trade benefit over the US. The remarks made by Trump over China and other nations in media resulted in the weakening of US dollar which Trump feels will favour US exports and boost manufacturing. It also led to the strengthening of Japanese Yen which is considered as a safe haven by currency traders. The US dollar dropped 0.6% against Japanese Yen to 111.95 Yen due to the uncertainty prevailing around trade policies by Trump. As a Forex trader, you should make use of real time trading charts and technical indicators to predict the future trends of currency movements, which will help you to make well-informed trading decisions.
Forex investors are eagerly awaiting Trump’s address to the US Congress on Feb 28th regarding changes in the monetary policy and possible corporate tax cuts. Trump Administration’s reflationary policies so far have had a positive impact on the US dollar and equities. The financial markets are interested to know about the tax reforms that will be proposed by Trump during his address to the Congress on Tuesday. The disruptive border adjustment tax that is under consideration by the Republican government under Trump aims at increasing taxes for imports and subsidises exports to boost manufacturing in the US. Russia has been on the positive side of Trump so far since he feels it’s a protectionist country which does not pose any threat to U.S. jobs. Hence, Russian Ruble has had a positive impact and has grown by 7.7% against U.S dollar.
Besides his proposal to build a wall between the US and Mexico, Trump has frequently opposed the NAFTA (North American Free Trade Agreement) during his campaign and wanted to restrict imports from Mexico and China by increasing the import tariffs. He promised to raise taxes for imports from Mexico and China by 35% and 45% respectively to reduce the imports from these countries. Such remarks have resulted in a considerable impact on both Chinese Yuan and Mexican Peso against the US dollar. Since Mexico is one of the biggest exporters to the US with more than 80.3% of its goods sent across border tax-free, scrapping of NAFTA and the introduction of new tariffs based on the proposed border tax reforms will have a great impact on the Mexican peso. His tweets have already weakened the Mexican peso against U.S dollar. It reached record lows of 21.619 when he criticised General Motors for exporting cars made in Mexico to the United States with the below Tweet. Ford motors also cancelled its production of $1.6 billion plant in Mexico in line with Trump’s policies to make in the USA.
“General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across the border. Make in U.S.A.or pay big border tax!”
The dollar tumbled against Japanese Yen and moved below 113.00 due to the uncertainty prevailing around the tax reforms to be proposed by Trump during his address to Congress and possible interest rate hikes by the Federal Reserve. Steven Mnuchin, U.S. Treasury Secretary under Trump Administration, stated that lot of work is to be done towards tax reforms, which would encourage inflation and push US interest rates higher. He also added that the impact of the new government’s pro-growth policies is unlikely to be seen this year.
Trump has pointed out several times that fiscal debts are getting beyond control and he wants significant changes in the Fed policy. This could mean the reversal of Quantitative Easing and an increase in interest rates which will result in a strong dollar. There are possibilities that Trump might even appoint a new chair to Federal Reserve who will do whatever he says. If there is any announcement of interest rate hikes by US Federal Reserve during the upcoming FOMC meeting in March, we can expect a surge in US dollar once again, and this will have a negative impact on other currencies like Chinese Yuan, Japanese Yen, Euro and Mexican Peso. We can expect a lot of fluctuations in the currency markets based on Trump’s trade agenda and as a Forex trader, you should start considering about investing in Forex binary options to increase your returns.
Don’t Forget These Important Points When Starting a Business
Now that so many people are starting businesses these days, you may feel like it is not such a big thing. After all, you can do it from the comfort of your own home. However, if you want to make a success of your company, there are a few points that you will need consider. Here are just a few of the main ones.
Don’t Overcomplicate Your Concept
The best businesses tend to focus on a particular niche and they don’t overcomplicate their initial concept. You may feel like you need to have a complex idea to get anywhere in business, but you are actually better off keeping it simple. If you try to do too much, this can be very difficult to market and customers won’t understand your business. And when you are choosing clients to target, go for a refined group to begin with.
Write Out a Checklist of What You Need to Do
Everything tends to become so much more simple when you note it down on paper in a bullet point list. This should start with writing your business plan, leading up to the point when you form your company with the likes of Your Company Formations Ltd. Following on from this, you should map out how you see the first weeks and months going. Having a clear plan helps to clarify the huge task that you have in front of you.
Overestimate Your Expenses
When it comes to your expenses, you should give yourself some room for manoeuvre. The odds are that you will spend more than you initially think, so it is always worth preparing for the worst with regards to your business costings. The last thing that you want to happen is to realise that you don’t have any money to go further, and you have to wind up your company before it has really gotten started.
Establish Your Support Network
Even if you plan on running the business by yourself, you still need to have a support team who will guide you along the way. These people don’t necessarily have to be business associates, though it does help to speak to people with experience and a clear idea of what they are talking about. A close group of family, peers, friends or mentors will prove to be invaluable to you as you are going down the difficult path of launching a business.
Generate Income Quickly
Cashflow is essential to all businesses, but especially newly-established companies. Your business needs to start generating money as soon as possible to ensure that it stays afloat. Rather than diving headfirst into running your own business, it may be wise to have an alternative source of income in case everything doesn’t go according to plan straight away.
Even though starting a business is easier than ever before in theory, there are still plenty of factors that you need to consider, and these are just a few of the main ones.
What We Can Learn From Tony Robbins About Being Financially Free
If there’s one guy that knows what it takes to be financially free, it’s life guru Tony Robbins. If you watch his seminars, you’ll probably start to wonder if there’s anything he doesn’t know about. He can help relationships, career changes, people with depression, and the reason you’re here – financial woes!
Being financially free is something that absolutely anybody can do if they are willing to take the steps to get there. Luckily for you, you can read this post rather than take an expensive trip to one of Tony’s seminars. Here’s what we can learn from Tony Robbins about being financially free:
You Have To Figure Out What’s Holding You Back
To become financially free, you have to first figure out what’s holding you back. You need to be brutally honest with yourself. Write it down. What do you think you’re doing or not doing that’s stopping you from reaching this goal? Perhaps you’re not doing anything at all and that’s the problem. Maybe you try but you procrastinate. Make sure you examine yourself thoroughly to figure out what the problem is.
You Probably Need Much Less Than You Think
How much do you really think you need to become financially free? In all honesty, it’s probably much less than you think it is. People think that they need hundreds of thousands in the bank to become financially free, but this isn’t the case at all. First, you start small. You start doing something even if it just makes you a little extra money per month, and it pays for your Netflix account. You then build it up, until say all of your bills are covered, then your entertainment is covered, and so on and so forth. If you actually took the time to work out how much you’d need per month to be financially free, you’d probably be surprised at the number. So do it.
When you have the number, you can start coming up with a plan to achieve it. Taking out an easy loan to get your ideas off the ground could work, but you need to make sure you can pay it back in the agreed time.
Your Actions Can Change Your Energy
Sometimes we just wake up on the wrong side of the bed. There’s nothing we can do about that initially. However, it’s a mistake to think that there’s nothing we can do about it at all. Actions can change your energy. This is why tony jumps up and down on a trampoline for a while and does other crazy things before going on stage. It’s why he encourages others in his seminars to do it too. Because the things we do and say can change the way we feel almost instantly, and that can change the things we do from day to day.
You Have To Become An Investor, Not A Consumer
To become financially free, you have to make the conscious decision to become an investor, and not a consumer. Most people are consumers these days. They buy without even thinking about what it is they are buying. Some people invest but not consistently, while others think about it but never actually do it. Starting to invest as early on as possible is one of the most sensible things you can do with your money.
Investment Trends: What You Need To Know For 2018
When it comes to investments, you’ll always find that there tends to be different trends. When you’re used to dealing with the stock market, bonds, or even mutual funds, you may be more than willing to let your fund manager handle the investments for you. But there’s always going to be more to making money than just the stock market. And this tends to be where some of the investment trends will come in.
Of course, there will be different stocks and businesses that become popular, and trends will surround that. But you don’t always have to look to the business economy in order to invest. Because there’s always commodities to consider too. When you’re new to investing, and you’re not all that knowledgeable about the different commodity areas that are available, you may want to stick to the stock market, and not necessarily move on to anything else. But there is money to be made in commodities. So if you’re interested in investing in this area, let’s take a look at some areas that could be worth considering for this year.
First of all, we’re going to start with the commodity of energy. This refers to the areas of oil, gas, coal, electricity, and even ethanol. This can generally be a big area to invest and trade in. The prices often fluctuate, which that then affect the rest of the economy too, as this commodity is linked heavily to utilities. At the moment, gasoline is the number one product recovered during the refining process, showing its popularity. Therefore, you may like to consider this as your investment choice. As well as trading in the product, you may also like to consider buying stocks in the area.
Another commodity to consider is precious metals. Investing in areas like gold and silver or even platinum is quite a classic way of both keeping and making money. These are all natural metals that tend to have a high value in the economy. So much so, that many people will buy themselves gold or silver or platinum jewelry and see it as an investment. However, it’s not just owning these precious metals as jewelry that can be great forms of investments. With predicted demand on the rise and a growth in the population, choosing to invest in precious metals like gold could be a great investment move.
Finally, as something that is a much more modern commodity to consider, you also have the various forms of cryptocurrency. In 2008, Bitcoin made its mark, but there is now a range of digital currencies that could be worth investing in. Although many people and even traders aren’t that knowledgeable on the subject, investing in cryptocurrency is thought of as being attractive due to the safety that comes with it, and the way that it’s free from Government interference. However, this can be quite a risky market, as price does tend to fluctuate, despite the reward potentially being high.
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