Markets focused on next round of US stimulusFinance | 8 Oct 2020 4:29 pm
The US presidential election is not likely to have a huge impact on financial markets in the short term, as market participants are more concerned with the stimulus, a financial industry executive says.
The question is when does underlying demand come back which could allow the economy to grow again and get that deficit back, said Simon Bishop, director of corporate hedging (APAC) at Western Union Business Solutions.
He expects the greenback to continue to be under pressure given the US budget deficit.
He prodicted continued demand for the Hong Kong dollar relative to the US dollar, keeping the local currency towards the bottom end of the trading band, due to interest rate differential and initial public offering activities.
The yuan will continue to strengthen to 6.5 per US dollar, or 0.8330 per Hong Kong dollar, helped by a strong domestic economic recovery. But the major concerns of Chinese economic growth are that more companies are looking to shift production bases to other markets like Thailand, Vietnam, Cambodia to avoid protectionism.