Barack Obama, when he was the President of the United States, began posting various news on his personal Twitter account. His posts quickly gained popularity and his profile got a ton of subscribers. Obama even got into the Guinness Book of Records by the number of subscribers.
Popularity in social networks is a very handy tool even for politicians. Since Trump took Obama’s place, his Twitter account has gained more than 64 million subscribers. Obviously, the news published by the President of the United States has a great influence on the foreign exchange market. Of course, it is difficult to imagine that only 140 characters are capable of managing the state currency. But believe me, once you really get into the topic, you will understand that you can make real money on Trump. Perhaps after this article, you will become one of his 64 million subscribers.
What Is So Unique About Trump’s Twitter
Today, most politicians use social networks. There is even a special term used - “Twitter diplomacy”. However, usually, politicians express their official positions there on the main political, economic, and cultural themes, and before publishing, their tweets pass a mandatory check of their teams. Donald Trump is the only politician whose posts on social networks do not have any censorship.
The US President uses twitter as a tool to publicly humiliate his opponents and express his personal opinion, often not reflecting the position of his Cabinet.
How to Analyze Trump’s Tweets
Trump's tweets are pretty easy to interpret due to the simplicity of the language he uses. No one knows whether he does this on purpose or simply is not capable of more complex speech. In any case, it is quite handy for traders because Trump speaks quite bluntly or explicitly alludes to his views and further actions.
When you analyze the tweets of the US President, you need to remember just a few simple rules:
- His publications have an effect on the market similar to ordinary economic news - within a couple of hours after the release of a tweet, the market may respond to the statement by strengthening or reversal of the trend.
- Tweets with criticism have weight. Publications praising the United States, as a rule, have no effect on quotes. Pay attention to the currencies of countries criticized by Trump.
- Since Trump tweets usually come out late in the evening or at night, they tend to have the greatest impact during the Asian session.
The Impact of Trump’s Tweets on Exchange Rates
As a rule, the publications of the President of the United States affect the exchange rate of the following currencies:
- US dollar
- Canadian dollar
- Mexican peso
- Japanese yen
If Trump's criticism goes wild then other currencies, such as the ruble, for example, may fall under attack.
The strongest impact on the US dollar is made by tweets containing the following topics:
- US Federal Reserve Policy. Donald Trump counted that the interest rates in the United States will be reduced to almost zero. However, Fed Chairman Jerome Powell, on the contrary, raised the rates, which caused Trump's indignation on Twitter. Any criticism of the Fed head on Twitter is perceived by traders as a possible dismissal of Powell from his post and a reduction in rates in the future. Each time this leads to a weakening of the US dollar.
- Discussion of sanctions and the trade agreement with China. This one is an easy one. If Trump promises to tighten policy on China and introduce new sanctions that invariably strengthens the US dollar. Improving relations with China, on the contrary, can negatively affect the USD, since in this case, investors begin to actively buy shares of Chinese companies that can benefit from the lifting of sanctions or the conclusion of a trade agreement.
- Currency wars. Another favorite topic of Trump that argues that countries deliberately devalue their currencies and so he threatens to start a currency war.
How to Track Trump’s Tweets
The high impact of Trump's tweets caused such a resonance that today you can even find special applications that track his publications. You don’t even have to read every tweet of his hoping that it will affect the currency pair you need. Programs will automatically find tweets for you on the specified trading instrument in the desired Twitter account.
Thanks to Trump, Twitter publications have reached a new level, and Forex traders have additional opportunities for earning. I hope this article has given you a general idea of how to analyze the desired tweets and make a profit on them.