Democracy in question
Following the runoff votes in the state of Georgia yesterday, a mob of Trump supporters stormed the buildings of the U.S Capitol. The invasion of political institutions in Washington forced the suspension of the debate on Biden’s Electoral College victory. A woman lost her life during the violence and was fatally shot. Condemnations flooded in of those who violently and forcefully sought to publicise their support for outgoing President Trump and demonstrate their opposition to the result of last year’s election. Perhaps more forceful condemnation, given his position as President of the United States, was aimed towards Donald Trump.
It took two hours after Trump’s supporters overwhelmed the Capitol, for Trump to order the National Guard to assist in the securitisation of Washington’s public offices. Even during this order he still offered the message to these rebels that ‘we love you’. Trump published a video tweeted around this time urging people to go home, but still fuelling their illegal activities asserting once again in the same broadcast that ‘we had an election that was stolen from us’ and that he would ‘never concede’. Twitter and Facebook suspended @realdonaldtrump, the President’s personal Twitter alias for his incitement and tacit encouragement of violence. Twitter enacted the suspension commenting that Trump had made ‘severe violations of our Civic Integrity policy’.
Following a curfew after a day of unrest and civil disobedience, peace is seemingly restored to Washington and the Capitol. Despite the suspension, the Senate has voted on an Electoral College objection that threatened to stand in the way of Joe Biden’s confirmation as victor of the 2020 Presidential Election. Republican diehards and those that might be thought to follow Trump blindly maintained their support for the challenges to Biden’s victory despite witnessing the chaotic scenes that had arisen earlier that day as a result of violations of democracy. In spite of some opposition, the obstacle was surmounted with 93 votes to 6, pushing President-elect Biden another step closer to the White House.
The unrest in the United States and the international condemnations over the blatant violations to democracy did unsettle risk conditions in foreign exchange markets. A US Dollar that might have been thought to weaken yet further given the blue sweep in the Senate following runoff elections in Georgia, remained firm, reflecting heightened political risk. A demand for safehavens and cash pushed USD higher to the detriment of many emerging market currencies. Only moments ago Congress confirmed Joe Biden’s victory in the 2020 election. It now looks clear for Biden’s confirmation as President later this month and his party will now control the Senate, boosting his ability to effect legal and political change within the United States. The market will have to adjust to this status quo and is likely to do so via a weaker Dollar and stronger EM currencies. However, yesterday was a reminder of just how dangerous Trumpism can be with approximately two weeks of the incumbent President left, which could stave off this shift in the short run.
Discussion and Analysis by Charles Porter
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