The US presidential election in 2024 is expected to have a significant impact on global markets, particularly the foreign exchange (FX) market. As policies shift and geopolitical dynamics evolve, certain currency pairs and instruments could see increased volatility and trading opportunities. This guide will explore the top 10 FX instruments that traders should keep an eye on following the 2024 US presidency, providing insights into potential trends and opportunities.
1. EUR/USD – US Dollar to Euro
The EUR/USD pair is one of the most traded currency pairs globally, representing the economic relationship between the United States and the European Union. After the 2024 US presidency, any changes in US fiscal policy, interest rates, or trade agreements could create volatility in this pair. Traders often monitor EUR/USD closely, as it tends to reflect both US economic policy and EU responses, making it a barometer of transatlantic relations.
Why It’s Important: As both the dollar and euro represent major global economies, EUR/USD often reflects market sentiment about US-European trade relations and central bank policies.
2. USD/JPY – US Dollar to Japanese Yen
The USD/JPY pair is highly sensitive to US interest rate changes and economic policy shifts. Japan’s role as a safe-haven currency further strengthens the importance of USD/JPY, especially during times of uncertainty. Any shifts in the US Federal Reserve’s approach to inflation and interest rates post-election could cause significant movement in this pair.
Why It’s Important: The Japanese yen is widely considered a safe-haven asset, meaning it can strengthen if markets react negatively to US political developments or economic changes.
3. GBP/USD – British Pound to US Dollar
The GBP/USD pair, often called “Cable,” could see notable fluctuations after the 2024 election. The US and UK maintain a close relationship, and political shifts in the US can influence trade dynamics, particularly in the wake of Brexit. Traders may observe GBP/USD closely for reactions to new US trade policies or regulatory changes affecting cross-border business.
Why It’s Important: GBP/USD provides insight into how changes in US policies impact the UK economy, making it a valuable pair for traders interested in transatlantic trade dynamics.
4. USD/CAD – US Dollar to Canadian Dollar
As Canada’s largest trading partner, the US plays a critical role in the Canadian economy. The USD/CAD pair is heavily influenced by US trade and energy policies, given Canada’s reliance on oil exports. Any changes in the US stance on energy or trade agreements with Canada could create significant opportunities for traders in the USD/CAD market.
Why It’s Important: USD/CAD is closely tied to energy prices, particularly oil, and reflects the economic ties between the US and Canada, offering trading potential in response to shifts in US energy policy.
5. AUD/USD – Australian Dollar to US Dollar
The AUD/USD pair reflects the economic relationship between the US and Australia, with added influence from China, a significant trading partner of Australia. After the 2024 US presidency, any changes in US-China relations could indirectly impact AUD/USD, as Australia’s economy is highly sensitive to Chinese demand for commodities.
Why It’s Important: AUD/USD is often viewed as a proxy for global commodity demand and Chinese economic health, making it highly sensitive to US-China dynamics and trade policy.
6. USD/CNH – US Dollar to Offshore Chinese Yuan
The USD/CNH pair represents the US dollar against the offshore Chinese yuan and is particularly sensitive to US-China relations. Post-2024, this pair could see significant volatility if there are changes in tariffs, trade agreements, or geopolitical tensions between the two countries. Traders interested in currency pairs that respond quickly to political shifts will likely find opportunities in USD/CNH.
Why It’s Important: USD/CNH is a key pair for tracking US-China relations, and any post-election policy changes or trade tensions could make this pair highly volatile.
7. EUR/GBP – Euro to British Pound
The EUR/GBP pair might experience shifts after the US election due to indirect effects on Europe and the UK from new US policies. If the new administration emphasizes a particular stance on European trade or influences global market sentiment, it could drive the EUR/GBP exchange rate.
Why It’s Important: EUR/GBP allows traders to focus on European economic health without direct exposure to the US dollar, which can be useful for diversified trading strategies.
8. USD/CHF – US Dollar to Swiss Franc
The Swiss franc is another safe-haven currency that often strengthens during periods of uncertainty. USD/CHF could be a valuable pair for traders post-election, especially if global sentiment shifts in response to the new administration’s approach to economic stability and foreign policy.
Why It’s Important: USD/CHF reflects risk sentiment and investor confidence, making it a go-to pair during uncertain periods following significant political events like a US presidential election.
9. NZD/USD – New Zealand Dollar to US Dollar
The NZD/USD pair, similar to AUD/USD, is influenced by global trade trends and US-China relations due to New Zealand’s commodity-driven economy. Any US policy changes impacting trade dynamics or global economic growth can influence the NZD/USD, creating opportunities for traders watching commodity-linked currencies.
Why It’s Important: NZD/USD provides exposure to the broader economic impact of US-China relations and global commodity demand, making it sensitive to shifts in trade and environmental policies.
10. USD/MXN – US Dollar to Mexican Peso
The USD/MXN pair is highly responsive to US-Mexico trade relations and economic policy changes. Post-2024, any shifts in US immigration, trade, or economic policies could significantly impact this pair. Given Mexico’s close economic ties to the US, the USD/MXN pair may experience high volatility, particularly if there are major policy adjustments.
Why It’s Important: USD/MXN is a key pair for traders interested in emerging markets and cross-border trade policies, as Mexico’s economy is closely tied to US policies.
Bitcoin’s Post-Election Surge
Following the election, Bitcoin’s price experienced a substantial increase, surpassing the $90,000 mark. This surge is attributed to the president-elect’s pro-cryptocurrency stance, including plans to establish a national Bitcoin reserve and position the U.S. as a global crypto hub. These developments have bolstered investor confidence, driving Bitcoin to new all-time highs.
Tesla’s Stock Rally
Tesla’s stock also saw a significant rise post-election, climbing over 14% in pre-market trading. The market anticipates that the new administration’s policies will favor the electric vehicle industry, potentially benefiting Tesla. Additionally, the appointment of Tesla’s CEO to a governmental efficiency role has further fueled investor optimism, contributing to the stock’s upward trajectory.
Conclusion: Preparing for Forex Opportunities After the 2024 US Presidency
The 2024 US presidential election will bring changes to economic policies, interest rates, and international relations—all of which impact forex trading. By focusing on the above FX instruments, traders can position themselves to take advantage of post-election volatility and emerging trends. Each currency pair offers unique opportunities based on different economic relationships and policy expectations.
As always, it’s essential for traders to stay informed on global economic developments and maintain a flexible approach. For more insights and real-time analysis, explore ForexTabs.com to support your trading decisions and navigate the forex market confidently in the wake of major political events.