as In this year’s US election, the situation is heating up as voters are divided between Democratic Party member Kamala Harris’ progressive tone and former President Donald Trump’s “America First” campaign. Financial Berhad (MIDF) has its own view leaning towards Mr. Harris.
MIDF says that while the Trump campaign is pushing an agenda of tax cuts, deregulation, and “protectionism,” Harris’ campaign is prioritizing “increased corporate and wealth taxes, targeted trade restrictions, and worker protections.” (quoted from the report) today’s business.
Protectionism is defined as a means of improving a country’s industry by imposing restrictions such as tariffs to protect it from foreign competition.
This will affect Malaysia’s trade and investment prospects regardless of who ends up at the top, but Malaysia’s existing trade relationship with the US could be challenged by President Trump’s protectionism. Yes, MIDF points out.
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However, Harris could have more positive implications, potentially strengthening trade relations between the United States and ASEAN.
In any case, Malaysia “will benefit from changes in trade flows and increased regional investment.
Betting markets and opinion polls are leaning slightly in Trump’s favor, but MIDF, as quoted, “expects” Harris to win.
Despite Trump’s slight lead in most battleground states, strong economic fundamentals such as “disinflation, income growth, and a robust labor market” cited make it clear that Trump has a narrow lead in most battleground states. Given the arguments above, other factors may also be working in Trump’s favor. Voters on the fence.
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Furthermore, MIDF believes that if Harris wins the election, the US dollar will depreciate in the short term, with the US dollar index (DXY) stabilizing at 102-103, with the ringgit likely to be supported by the spread of Fed rate cuts and policy continuity. He said there is.
If Harris wins without a “decisive landslide”, the USDMYR exchange rate will reportedly reach $4.25 by the end of 2024 and $4.10 by the end of 2025, assuming current economic conditions continue. may be predicted.
Meanwhile, a Trump presidency could cause the US dollar to appreciate and inflation to rise, impacting Fed policy and emerging currencies including the ringgit, leading to Fed interest rate cuts of around 4.0-4.5% by 2025. May be suppressed. USDMYR will reach 4.48 by the end of 2024 and then slowly recover to 4.37 by the end of 2025.
Not only that, MIDF said that while in the short term a Harris victory could lower US Treasury (UST) yields and benefit Malaysian government bonds, a Trump victory could signal a spike in volatility. , said it could limit the Fed’s rate cuts and push yields higher.
These two scenarios, as cited, suggest that the US budget deficit remains high, thereby impacting Malaysia’s ‘investor sentiment’ and ‘bond market trends’ .
