Real Estate Investor Magazine South Africa Dec/Jan 2016/17 | Page 56

EXCHANGE RATES

First Brexit,

then Trump and then...

What it means for the Euro, the Pound and the Rand
BY ANDREW RISSIK

T

he applecart was well and truly overturned
recently in the US elections. The fallout from
Donald Trump’s victory has slowly started to
moderate and now we’re left with the question: In a
year that has already seen Brexit, which countries and
currencies stand to benefit and which are going to
suffer due to these seismic shifts in Western politics?

Why did the US back Trump and the UK
shun the EU?

In my opinion, it’s pretty clear what caused UK voters
to choose to leave the EU and US voters to pick
Donald Trump – middle class disillusionment. Years
of ever-increasing taxes, stagnant wages, lower social
mobility and job losses have come to a head. This easily
mobilised cynicism in the electorate was pounced on
by Trump and the leave campaign expertly.
Middle class taxpayers in the US and UK have
been economically strained for many years now. With
local manufacturing and production jobs dwindling
in favour of globalised service industry jobs, many
families have come under intense pressure.
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DEC/JAN 2017 SA Real Estate Investor

The working and middle class families in the US
and UK have been left trying to make ends meet by
working in retail and other low-level service industries
– industries that are now reliant on cheap imported
goods that were often once produced locally.
In the US, Trump’s biggest bugbear was the
outsourcing of manufacturing and production to the
lowest bidders. This has come at a great cost to local
manufacturing industries and the former reality TV
star has promised to bring these jobs back to the US.
In the UK, the middle class has also felt the
pressure of globalist economic policy. But the focus of
Brexit seems to be more on leaving the shackles of the
EU rather than an outright rejection of globalisation
and free trade.
Both the Brexit and Trump campaigns tapped into
the frustrations of the missing-middle demographic,
but the two powerhouses of the West seem to be
taking very different paths. Britain appears to be
wanting to strengthen its ties with the rest of the
world, while Trump seems intent on isolating and
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