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(Getty)
- The rand skyrocketed as Joe Biden’s path to emerge as president of the United States became somewhat clearer.
- A Biden victory is considered bad news for the dollar, particularly because it will be less protectionist than US President Donald Trump.
- The rand is now trading below R15.90 / $, its best level since March 11 this year.
- For more articles, go to www.businessinsider.co.za.
On Wednesday night, the rand recovered to its strongest level since March 11 when Democratic contender Joe Biden took a narrow lead in key states.
By a small margin, he is now the favorite in Wisconsin, Nevada and Arizona. If he wins these states, Biden may have a good chance of emerging as president of the United States.
A Biden win is considered bad news for the dollar. He is expected to pass a large stimulus package, which will add to the debt of the US government and possibly dilute the value of the dollar. Biden should also stop the American trade war with China and others. This will mean more imports to the United States, which could also weigh on the dollar.
Along with other global currencies and markets, the rand has had a tumultuous 24 hours.
It plunged to nearly R16.40 / $ earlier on Wednesday, as the US election overturned many expectations of a clear Biden victory. Instead, it became a problem, with President Donald Trump performing much better than expected, easily taking over the key state of Florida.
In the early afternoon, the rand was trading 1.5% stronger at R15.86 / $, and it also firmed up against the euro (R18.67) and the pound (R20.73).
At the height of the lockdown, and following Moody’s downgrade of South Africa’s sovereign debt, the rand plummeted to R19.26 / $ in April.
How the US Presidential Elections Could Play Out
Trump got off to a good start on Election Night with a string of victories in critical states like Florida, Texas, Ohio and Iowa. Comparatively, Biden got off to a more modest start with wins in Minnesota, Illinois and Virginia, along with projected victories in reliable blue states like New York and California.
Yet despite the president’s strong start, Biden has more paths to the 270 electoral college votes needed to win the election than Trump. According to projections from Decision Desk HQ, the former vice president currently has 227 electoral votes compared to 213 for Trump.
Increasingly, it appears that the outcome of this election will come down to Michigan, Wisconsin and Pennsylvania, three rusty belt states that Trump turned from blue to red in 2016 to win the White House.
This year, all three states are up in the air.
As of Wednesday night, Biden has an approximate 25,000 vote lead in Wisconsin, with 99% of precincts reporting. In Michigan, Trump is ahead by nearly 9,000 votes with 87.25-99% of constituencies reporting. The president has a significant advantage of nearly ten percentage points, or 600,000 votes, over Biden in Pennsylvania, but there are also nearly 2 million outstanding ballots that have yet to be counted.
The good news for Biden is that he currently leads in two key states, Arizona and Nevada, which have yet to be called up. According to local reports, Arizona will release its next wave of results at 04:00 am Thursday morning (South Africa time), which should provide a much clearer picture of just how wide Biden’s lead is in the state.
All in-person votes from Nevada have been counted, leaving only mail ballots and provisional ballots to be reported. The state is not expected to report any more votes until Thursday, for Nevada Division of Elections On twitter.
If he gets those votes, Biden would need to win just two of the three Rust Belt states to get to 270. Trump, on the other hand, needs to win Georgia, North Carolina, Pennsylvania and Michigan or Wisconsin to fend off Biden’s challenge.
The article has been updated with the latest exchange rate and election updates. US Election Report By Sonam Sheth and Madison Hall
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