As if there weren’t enough on the economic calendar to keep Forex traders busy, politics is expected to make a notable intrusion next year. Since governments control fiscal policy, it’s not a surprise that who wins an election can impact how forex markets react.
But 2024 is shaping up to be something extraordinary. Not just because of the US election, though that’s likely to garner most of the headlines. This year, there is an uncommonly large number of key economies and popular currency trading countries that are heading to the polls. Here are some of the key events to keep an eye on this year:
Even without all the hubbub around the former president Trump candidacy, the US election would normally shake up the markets as polls shift in favor of one candidate or the other. At the moment, Trump is leading in the polls over incumbent President Biden. But, the parties are still in primary season, fighting amongst their prospective candidates. Substantial changes could happen once Republicans and Democrats start facing each other.
UK: Date Uncertain
The UK is expected to hold a general election this year, following a pledge by current Prime Minister Sunak to do so. Legally, the election can be held as late as Jan 25, 2025, but there is rampant speculation that it will be called for sometime in May. However, since dissolving Parliament to call for an election is up to the Prime Minister, the date can suffer modification in an effort to find the best position in the polls. Opinion polling suggest that opposition Labour are well ahead over the incumbent Conservatives, which could complicate the election selection date.
A popularly traded emerging market and commodity currency, South Africa’s general election campaign could generate headlines to push around the Rand. President Ramphosa is up for reelection for another 5-year term in the country’s unusual Parliamentary system, which has the President and head of government in the same person. The ANC is widely expected to retain power, but recent polling saw a shift below the majority, which might mean potential coalition negotiations following the election.
Another popular emerging market currency, and with rising popularity among traders, Mexico is expected to select a new President next year, as well as a new Congress. Under the prior president, known popularly by his initials AMLO, Mexico had among the highest real interest rates in the world, making it a popular destination for carry trading. His ideological successor, Claudia Scheinbaum, is seen leading in the polls by a wide margin.
The European Union will hold parliamentary elections for the first time since Brexit. The campaign is expected to bring renewed attention on EU institutions amid rising Euroscepticism. The complicated process doesn’t see advance opinion polls at this stage, but could provide a platform for potential concerns over the Euro.
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- Source: https://www.orbex.com/blog/en/2023/12/forex-in-an-extraordinary-election-year
