When we look at the record of the dollar last year, we see that this currency has grown by about two hundred percent over the past year. This figure is very shocking for financial market analysts and has actually had a tremendous impact on the stagflation of markets. In this memo, we will deal with the fluctuations of the dollar price in the Iranian and international markets after the US presidential election. Please be with Artan Press.
If we want to have a fundamental look at the exchange rate, we must look at the issue that the trade balance is one of the most important macro variables specific to any economy and is one of the most important strategic economic constraints in the macro dimension for developing countries. One of the most important factors that underlines the value of the national currency of countries against other currencies and practically shows the upward or downward path of the intrinsic value of shares, is the category of trade balance The US presidency is tied, and in this memo we will explain why the global dollar price outlook has become so strongly dependent on this factor.
*** The financial approach of the United States in the coming years
With Mr. Biden’s victory in the US presidency, the financial approach of the United States in the coming years was practically mapped out. It paved the way for the US industry to become more active and reduce the trade deficit. In practice, Trump was trying to improve the US trade balance in addition to reducing the US trade deficit, and in fact, by strengthening the strength of the dollar in world markets. Provide most of your economy at the macro level.
Mr. Biden’s approach to the economic debate is in stark contrast to Trump’s approach over the past four years. The Biden administration will take office at a time when 5 million people are expected to face long-term unemployment and many small businesses are facing bankruptcy. In such circumstances, there is no escape from turning to expansionary policies, and this will be Mr. Biden’s first choice.
By choosing the expansionist economy approach, the Biden government must print money and protect the people of the society against crises by creating inflation. This will greatly affect the value of the dollar and weaken it against other world currencies. Therefore, as we saw in Iran, after the election of Biden and the reduction of the perspective of political risks between Iran and the United States, we saw a decrease of 5,000 Tomans in the price of the dollar in Iran, which will definitely happen in the future.
*** The direct relationship between free trade and the devaluation of the dollar
Biden strongly agrees to provide a framework to support free trade, but one workplace will challenge this. His insistence on shipping goods on American ships will not eliminate tariffs quickly, and the free trade boom will become too entrenched in retail protectionism. This will be another reason for the dollar to depreciate against other major international currencies.
After the presidential election, Trump has practically played a very important role in controlling the exchange rate in Iran. Whenever the market maker, ie the central bank or the national exchange, shows rates close to the price of free currency on the board and practically leaves the market at the ceiling. Speculative activities increase sharply and practically provide the ground for the growth of the dollar price. Many analysts believe that a reduction in the dollar formally by the market maker will signal a decrease in the price in the short term.
With the election results being determined at the beginning, the exchange rate in the Iranian market decreased by about 5 thousand tomans. But immediately, the non-acceptance of Taj by Trump, this market reacted to this issue and compensated about 2 thousand tomans from its fall. At present, the dollar is fixed at 27,000 and the markets are waiting for this rate to decrease further. But the outlook for the currency is not clear at all until the end of the year, because Trump could change the political equation in Iran and keep the price of the dollar inflamed by the end of his presidency by creating political risks.
*** The downward trend in coin prices
The situation in the coin market was assessed as a downturn in the dollar market. Due to the sharp convergence of the dollar and coin prices in Iran, with the decrease of the dollar exchange rate, we witnessed the emptying of part of the coin price bubble in Iran. So that in a short period of time, this precious metal was traded even below 12 million Tomans. But with the cross-sectional and sharp momentary growth of the dollar price and the rising risk of surprises for gold and foreign exchange capitalists, gold made up for part of its decline.
With the election of Biden as President of the United States in the Iranian market, we will see a wave of losses, which is often emotional and unfortunately have no technical basis. As it was observed, this issue decreased to 23 thousand Tomans in the dollar. But immediately in this period We have witnessed strong resistance from market participants. Therefore, reducing prices in the short term is not psychologically possible for today’s market, and in practice, sharp reductions only provide space for oscillators.
*** Forecast of the future of the dollar price
Our recommendation is not to enter the foreign exchange market in the current situation, especially for the general public, because in both scenarios, the rise or fall of the dollar may be affected. One of the effects of Biden’s choice on the current market was to create forgetfulness in the market. Forgetfulness is a kind of analysis and study of the technical dimensions of the market. An event that is very much witnessed in the Iranian market Are. In the current situation, the Iranian market had relied heavily on news because virtually no event from within and based on technical issues had the power to influence the market.
Our forecast in the short term is a partial decline in the dollar and euro exchange rates. But the continuation of this downward trend strongly depends on the market-making behavior and the central bank and the government. If the central bank’s policy is to support the affected sections of society Due to the damage caused by the corona and other economic damages, we will see the printing of money and the devaluation of the national currency. This issue will be analyzed and clarified in more detail in the coming days.