The exchange rate of major currencies in the market often does not react to political events as sharply as the exchange rate of the US dollar, which is characterized by deeper investment activity and liquidity. According to the statement of James McGiver, politics is often a key factor for currency rates in developing economies. Choices, leadership, and government policy can significantly influence trade patterns and investments.
However, a huge increase in the dollar after presidential elections indicates that politics has a huge significance for the dollar. In other words, the dollar is extraordinarily sensitive to political upheavals. The dollar has risen by approximately 2% compared to the basket of major currencies at the beginning of the month.
