Leather Pipeline: US election slow to make an impact so far

In the first Leather Pipeline market intelligence report to appear since the 2016 US presidential election, there are clear indications that the biggest immediate impact on the leather industry will be the election’s effect on currency exchange rates.

“At this stage it remains unclear what the changes in the US will mean for global stability and global business, as well as for the US economy,” the report says.

It adds that populism and nationalism appear to be returning in many parts of the world and warns that “this has never been a positive foundation for global trade and uncertainty and instability have never been good news for economies”.

Nevertheless, the report, which is available to read in full in our Market Info section, points out that a predicted quick fall in the value of the US dollar in the event of an election win by Donald Trump has failed to materialise. “For the moment the opposite has happened and the dollar gained value immediately after the election,” the Leather Pipeline report says.

It makes it clear that the dollar could see important changes further down the line and that its value is going to be a key part of the leather raw material equation in the coming three-to-six months. It also warns that the “relatively narrow ranges” we have seen for quite a while now could be broken and that “a completely new valuation” looks possible.

For this reason, it says the market may be dictated more by currency in the weeks ahead than by supply and demand

Posted on 11/15/2016 at 03:54 by Abdullah