Trump or Biden, Who's Best for Dollar vs. Euro?

Strategists at JPMorgan Chase & Co. wrote this week about the odds narrowing on a Donald Trump win in the U.S. presidential election. His opponent, Joe Biden, is still comfortably ahead in the polls, but the bank’s commentary got me thinking about what impact the result might have on Europe’s markets, not least on the euro. What would four more years of Trump mean for the single currency, and would a Biden presidency mean anything different?

The dollar’s weakness has become a cause of angst for the European Central Bank, which doesn’t have an official mandate to manage the euro but always has the currency pretty high up in its thoughts. As I’ve written before, a stronger euro reflects in part Europe’s better performance — so far — in managing the pandemic. Having a robust currency isn’t always a bad sign. The problem for the euro zone is that its economy, and Germany’s in particular, is dominated by exports. A highly valued euro is potentially bad news for the region’s manufacturers.