It’s been just over two weeks since Joe Biden took over the reins of the world’s most powerful country and moved into 1600 Pennsylvania Avenue, Washington DC. Based on his first ten days, what can we expect from the USA’s new president?
Following his inauguration on 20 January, President Joe Biden wasted no time getting to work, immediately issuing a number of executive orders to make his mark on the presidency. Executive orders are means by which a president can unilaterally invoke to issue directives to federal agencies. On his first day in office, Biden issued no less than nine executive orders, which represents a modern historical record.
Even before he got his feet under the desk of the Oval Office, Biden had said he planned a “10-day blitz” to “reverse the gravest damages of the Trump administration” with the aim of “restoring America’s place in the world.”
Within these 10 days, 42 executive orders were issued. As had been promised, most of them were aimed at reversing the policies of his predecessor, but there were also some surprises. Among the most noteworthy of these executive orders were:
Travel restrictions: An immediate reinstatement of travel restrictions to prevent the spread of Covid-19, aimed at travellers from the EU, the UK, Ireland, South Africa and Brazil.
Termination of border wall project: This relates to Donald Trump’s construction of a wall along the border with Mexico.
Re-joining the Paris climate agreement: The agreement, which had been signed in 2015, is designed to limit greenhouse gas emissions.
Cancelling the Keystone XL oil pipeline extension: The $9 billion pipeline project, which was slated to run through South Dakota, would transport tar oil from Canada to refineries in Texas.
Unleashing $1.9 trillion in economic stimulus: The flood of measures is designed to pull the US economy out of its coronavirus doldrums.
Executive orders aside, Joe Biden has dropped numerous hints and made statements about the direction his presidency will take in areas of domestic and foreign policy. In terms of the latter, Biden has indicated that he will attempt to repair relations with China, damaged by Donald Trump’s tough stance on terms of trade.
At the same time, Biden has rebuked Russia, saying the US will no longer “roll over” and has cancelled Trump’s withdrawal of US troops from Germany and other NATO countries in a move that could be seen as provocative by Moscow. Indeed, the Kremlin responded by saying it would not tolerate any ultimatums imposed by the US, taking aim at “aggressive, unconstructive rhetoric.”
Closer to home, Joe Biden has long made his feelings known about his disapproval of the UK leaving the EU and has said that the UK will not receive any favourable treatment when it comes to striking trade deals with the US. Nevertheless, Boris Johnson was the first leader to receive a call from Joe Biden after his inauguration, and the President praised the UK’s efforts to reduce carbon ,emissions, so this could change.
Much of Joe Biden’s campaign rhetoric was aimed at winning over voters on his domestic policy platform. Biden has promised to reverse the Trump administration’s ‘hostile environment’ on immigration, making it easier both for potential immigrants to come to America, as well as for illegal immigrants to register themselves lawfully.
In addition, Biden has promised a number of equality measures aimed at minorities, including overturning Donald Trump’s ban on transgender people enlisting in the military, and has signed an executive order that aims to promote racial equality through federal programs. The mandate aims to advance various social justice policies, and combat race and gender stereotyping.
Safeguarding the climate is at the heart of many of President Biden’s policies. In addition to cancelling the Keystone pipeline and re-joining the Paris Agreement, Biden plans to divert energy away from fossil fuels and create millions of jobs employing workers to make electric cars, fit solar panels, and make polluted industrial sites into “new hubs of economic growth.”
The first few weeks of the Biden presidency have seen a reverse in the US Dollar’s ten months of decline. This likely has little to do with President Biden’s policies, however, and is more to do with perceived levels of risk in global currency markets. In fact, Biden’s $1.9 trillion in stimulus money is likely to have a weakening effect on the US Dollar due to the devaluing effect caused by increasing the money supply.
In contrast with Donald Trump, Joe Biden is likely to be much more aligned with the policies of the Federal Reserve, which sets interest rates, and this is likely to mean more stimulus and for longer. Most analysts agree that this will have a devaluing effect on the Dollar, not taking into consideration swings in risk appetite. USD always does well in times of heightened geopolitical risk, so a lot rides on whether President Biden’s foreign policies stir up tensions or not.
Although a new US president sits in the White House, one thing is clear: while Donald Trump – with his uncanny ability to move markets with a single Tweet – may be gone, the factors that led to so much volatility in currency markets over the last couple of years most certainly have not gone away. To that end, we can expect to see a few surprises in the markets caused by external factors as Joe Biden’s presidency progresses. And while sudden changes may be unwelcome as you try to plan the future they are, unfortunately, a fact of life.
Nevertheless, there are things you can do to protect against volatility in the currency markets and make the value of your transactions more secure. We have a number of products that you can use to safeguard against unexpected changes in exchange rates, giving you peace of mind, whatever is happening in the wider world. If you’d like to find out more get in touch with us here at Currency Solutions and we’ll tell you how we can help.
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