Biden Boosts the Euro, But the Dollar’s Still King
Traders have driven the dollar down in anticipation of more U.S. fiscal stimulus. But the greenback will remain the world’s reserve currency.
The euro has been resurgent since Biden’s victory became clear.
Photographer: Amir Hamja/BloombergThere’s nothing quite like a little bit of dollar weakness to signal traders and investors have a renewed appetite for risk. The world’s equity markets were already flashing green even before Pfizer Inc.’s Covid-19 vaccine announcement. And the euro, along with most other currencies, has been resurgent against the U.S. currency since it became clear that Joe Biden is now the President elect. But don’t confuse short-term shifts in the currency market with any diminution of the dollar's dominant position in global finance.
In fact a weaker dollar is pretty much good news for everyone, including American exporters (although an honorable exception can be made for the Japanese yen, which is getting rather too close to the 100 level with the dollar for the Bank of Japan's comfort).