What does the US election mean for currency risk?

By on November 1st, 2016 in Editorial

Like a latter-day Christopher Columbus, America is sailing bravely into the unknown, as primed for the possibility of discovering buried treasure as being flambéed by a dragon. We hear conflicting reports from our shipmates gazing through the restricted apertures of their portholes: some claim to see treacherous thunderstorms roiling the water, others a splendid sunrise skimming jewels across the sea.

Polls are consistently placing rusting android Clinton ahead of mewling infantilist Trump by a significant margin, but in the wake of June’s shock EU referendum result, pollsters have become little more than people to be angry with once we’ve found out how wrong they were.

Pundits have gone into tailspins trying to predict what each outcome might mean for the USD, how consumers can best manage their exposure and even how it might be possible to profit from potential upcoming volatility. As one of our customers found in the run-up to the EU referendum, currency exchange can be an effective way of limiting risk in the face of market volatility.

It’s worth remembering that uncertainty and opportunity are two sides of the same coin. Although market volatility increases risk, it presents just as much potential to maximise profits as it does to amplify losses; any dramatic economic situation is fertile ground for traders. In the words of Britain’s most trusted financial adviser, Money Saving Expert’s Martin Lewis (speaking about Brexit): “Don’t automatically read risk as a bad thing. It simply means there’s more uncertainty – a greater variance of possible outcomes.”

“The public has been left disconcertingly unsure about what is fact and what is fiction”

But as much as uncertainty can be a boon to traders, voters have been extremely vocal in their frustration with uncertainty and untruths in both candidates’ campaigns. Over the course of three historically incendiary presidential debates – with accusations of lies, hyperbole and outright criminality flying in both directions – the public has been left disconcertingly unsure about what is fact and what is fiction.

What does seem certain is that people have had enough of opaque arguments and complex institutions that may or may not be acting in their best interests. They are tired of being confused and of struggling to understand how to make the best decision, and of this grey area being exploited by supposedly reputable individuals and organisations that seek to profit from their position of power (as Lloyds Bank have in their imposition of hidden fees on smaller businesses that lack the clout to protest).

Whatever the future holds, people are crying out for stable, straightforward systems characterised by transparency and honesty, and for confidence that their money is being handled securely and fairly while getting them the best possible deal. They want to be in control of the tools that will insulate them as much as possible from any uncertainty that might be lurking around the corner.

And this is precisely the service that we at freemarket promise our customers.


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James is freemarket’s Chief Commercial Officer. He has a history of finding new ways to solve age-old financial challenges and was responsible for launching some of the first online money transfer and prepaid card initiatives in Europe.


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