- Don’t be Fooled by the Pullback in the Dollar Because…. - November 14, 2018
- Rise of the USD – How high can it go with - November 14, 2018
- VIDEO – Targets for GBP, USDJPY and EURO - October 5, 2016
- RBA Meeting Preview - October 3, 2016
- How to Trade the Dollar into the Presidential Debate - September 26, 2016
- Here’s How to Trade the Sept ECB Rate Decision - September 7, 2016
- Bank of Canada September Preview - September 6, 2016
- Will August Payrolls Disappoint the Dollar? - September 1, 2016
- Where is the Dollar Headed this Week? - August 29, 2016
- Will Aug NFPs Help or Hurt USD/JPY? - August 4, 2016
In my Daily Currency Focus for GFT, I talk about whether there will be a bounce in currencies on Obama’s Inauguration Day:
On Tuesday, the United States of America will swear in a new President. Unlike many other Presidents in the past, the Obama phenomenon spans the globe. This global support has spurred speculation that we may see an Obama Bounce in US equities and currencies on Tuesday. However based upon the past price action of the Dow Jones Industrial Average on Inauguration Day (Jan 20), investors should think twice about an Obama Bounce.
Taking a look at 50 years worth of data which spans 10 Presidents, Inauguration Day result in more down days than up. The Dow fell on January 20th 12 out of the past 16 Inaugurations. Although the trend was much more significant in the 60s and 70s, it has been relevant since then. The pattern also does not hold any bias to the party of the new President as exactly half of the positive days occurred during either parties new administration.
However it can be argued that the global adoration of Obama is unique. Many people call Barack Obama the John Kennedy of our times and it should be worth noting that stocks rallied on the day that Kennedy took office. History does not support arguments for an Obama Bounce but it is still a possibility. Since currencies are taking their cue from equities, if investors express their optimism towards Obama in equities, we could see a bounce in currencies as well.