The president elections in US impacted financial markets since the beginning of the election process. Dollar, gold and stocks volatility rose above the normal. Mexican pesos saw 2% growth. Gold dropped that much. And one week till the elections things got dramatic. Dollar index fall 1. 42%, S&P 500 saw 1.94% drop, in contrary gold started to rise and became 2.38% more expensive. Economists try to explain and predict market move. Let’s first look into general information.
Elections impact financial markets in every country. A research made from 466 election period in 79 countries between 1980-2006 shows that investors become less sensitive to the price during elections. This lack of interest can be up to 40%. It depends on democracy, corruption level and level of government involvement in business. In us investors become 20% less sensitive to the price during the elections.
This is because of the possibility of elections to change economic situation. New president can cause legislative or policy change that can cause prosperity in one sphere and decline in another, or may open new possibilities. Investors also can behave because of political loyalty or rivalry.
Political rhetoric al…
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