NEW YORK, Oct. 29, 2020 /PRNewswire/
-- Motoki Maruyama,
Managing Director and Head of FX and Rates Trading in the Americas
for Mitsubishi UFJ Financial Group (MUFG), estimates the
probability of a weaker dollar in the near term at 60% following
the U.S. presidential election on November
3.
Election scenarios—and their short-term consequences
"A scenario in which the Democratic Party wins the White House,
gains a majority in the Senate and retains a majority in the House
of Representatives would likely unleash a multi-trillion-dollar
package of fiscal stimulus and result in a major expansion of the
budget," says Mr. Maruyama. "In the short term, Washington's effort to issue trillions in new
debt in order to spend its way out of a recession would lead to a
'risk-on' environment and a sell-off in the dollar that would exert
downward pressure on its value."
Conversely, in Mr. Maruyama's view, three scenarios would lead
to a "risk-off" environment and a stronger dollar in the near term:
(1) a White House victory by Democratic nominee Joseph R. Biden with Republicans retaining their
majority in the Senate; (2) a victory by the incumbent President,
Mr. Donald J. Trump; or (3) a
contested election result with no clear winner for a protracted
period. "All three scenarios could amplify political gridlock and
throw prospects for a stimulus plan into question—at least in the
immediate future—since we believe the Democrats will likely keep
control of the House of Representatives," he says.
Long-term view: A weak dollar, mixed trends among
emerging-market currencies
Over the longer haul, Mr. Maruyama believes the dollar will
weaken against most major currencies regardless of the election
outcome, since U.S. interest rates are likely to remain low in the
foreseeable future. He also predicts that the currencies of
emerging markets running current account deficits whose economies
are dependent on the export of natural resources—such as
Brazil, Mexico, Argentina, South
Africa and Turkey—will weaken over time, especially if the
COVID-19 pandemic persists and continues affecting their
economies.
In contrast, currencies of select emerging economies in
Asia that have reigned in the
pandemic, maintained stable or growing economies and enjoyed
current account surpluses—including China, South
Korea, Taiwan and
Singapore—will strengthen in the long run, in Mr. Maruyama's
view.
MUFG is one of the world's largest financial institutions by
assets, with approximately $3.2
trillion, as of June 30,
2020.
About Mitsubishi UFJ Financial Group, Inc.'s U.S. Operations
including MUFG Americas Holdings Corporation
The U.S. operations of Mitsubishi UFJ Financial Group, Inc.
(MUFG), one of the world's leading financial groups, has total
assets of $379 billion at
June 30, 2020. As part of that total,
MUFG Americas Holdings Corporation (MUAH), a financial holding
company, bank holding company, and intermediate holding company,
has total assets of $167.4 billion at
June 30, 2020. MUAH's main
subsidiaries are MUFG Union Bank, N.A. and MUFG Securities Americas
Inc. MUFG Union Bank, N.A. provides a wide range of financial
services to consumers, small businesses, middle-market companies,
and major corporations. As of June 30,
2020, MUFG Union Bank, N.A. operated 348 branches,
consisting primarily of retail banking branches in the West Coast
states, along with commercial branches in Texas, Illinois, New
York, and Georgia. MUFG
Securities Americas Inc. is a registered securities broker-dealer
which engages in capital markets origination transactions, domestic
and foreign debt and equities securities transactions, private
placements, collateralized financings, and securities borrowing and
lending transactions. MUAH is owned by MUFG Bank, Ltd. and
Mitsubishi UFJ Financial Group, Inc. MUFG Bank, Ltd., a wholly
owned subsidiary of Mitsubishi UFJ Financial Group, Inc., has
offices in Argentina, Brazil, Chile, Colombia, Peru, Mexico,
and Canada.
Visit www.unionbank.com or www.mufgamericas.com for more
information.
About MUFG
Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the
world's leading financial groups. Headquartered in Tokyo and with more than 360 years of history,
MUFG has a global network with over 2,700 locations in more than 50
countries. The Group has over 180,000 employees and offers services
including commercial banking, trust banking, securities, credit
cards, consumer finance, asset management, and leasing. The
Group aims to "be the world's most trusted financial group" through
close collaboration among our operating companies and flexibly
respond to all of the financial needs of our customers, serving
society, and fostering shared and sustainable growth for a better
world. MUFG's shares trade on the Tokyo, Nagoya, and New
York stock exchanges.
Visit https://www.mufg.jp/english for more information.
Press contact:
Assaf
Kedem
T: 212-782-4926
E: akedem@us.mufg.jp
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SOURCE MUFG