FXStreet reports that Thomas Harr, Ph.D., Global Head of FI&C Research at Danske Bank discusses some of the political and economic consequences of the US election.

“Biden’s win improves the prospects of transatlantic cooperation and re-engagement with multilateral agreements and institutions such as the Paris Agreement, WTO and NATO. However, it is his approach to China which will have the most far-reaching geopolitical and economic consequences. The US and China need a mechanism for dialogue but the US has changed, as well as China under Xi Jinping’s leadership, and I don’t believe the relationship will improve under Biden.”

“A possible prolonged period where Trump refuses to concede defeat would not have much impact on markets, which will refocus on the virus, the prospects of vaccines and the economy. However, Georgia run-offs are crucial for markets.”

“The USD initially strengthened on election uncertainty and a divided government but weakened as Biden emerged as the likely winner with a chance of Senate control. I expect more USD weakness against CNY/CNH as the risk of trade wars has diminished, whereas I believe that EUR/USD will peak below 1.20 and range-trade due to the very weak macro backdrop in the eurozone.”