The Trump Effect on Currencies
Rhetoric has already had an impact on currencies in a big way
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
Targeting companies or entire nations on Twitter is an unprecedented and controversial method of communication for a President-elect – but one can’t argue with its effectiveness so far.
In today’s chart, we take a look at Donald Trump’s rather unconventional form of “monetary policy”, and how it has potentially influenced the U.S. dollar and five other major currencies since his election in November.
Ready, Aim, Tweet
A preview of President-elect Trump’s “America First” directive can already be seen on Twitter.
Trump’s infamous account, which is followed by 18.8 million people, is being used every day to highlight the potential winners and losers of future policies.
And markets are listening.
|Currency||% Change (vs. USD)|
The above table shows change in the value of foreign currencies against the U.S. dollar between November 7th, 2016 and today. To be fair, it is worth noting that oil prices have also rallied over this time, and oil also has a pronounced effect on some currencies.
Central to “America First” is a Trump-branded form of protectionism, which aims to keep jobs and dollars in the U.S at all costs. The President-elect has repeatedly blasted China for currency manipulation, as well as automotive companies which seek to produce cars in Mexico.
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!
— Donald J. Trump (@realDonaldTrump) January 3, 2017
China, as one of the world’s major economic powers, has some leeway in any war of words with Trump. While the country sends 18% of its exports to the United States, it could also theoretically benefit economically with the U.S. taking a step back from foreign entanglements. China also holds $1.12 trillion of U.S. treasuries, which gives it some additional leverage.
On the other hand, Mexico has a lot more to worry about. The country sends 80.3% of its exports north of the border and could conceivably lose significant amounts of business if NAFTA is scrapped and tariffs are re-introduced. As a result, even with oil’s gains over the last two months, the peso has dropped -13.4% in value since Trump’s election in November.
An Unlikely Friend
On the opposite side of the spectrum, Trump has been making moves to warm up relations with Russia – a protectionist country that isn’t really a “threat” to U.S. jobs.
Great move on delay (by V. Putin) – I always knew he was very smart!
— Donald J. Trump (@realDonaldTrump) December 30, 2016
Russia, which has been on Trump’s “good side” so far, has had its ruble trade 7.7% higher since the election. These gains partially reflect the future easing of sanctions that were put in place after Moscow’s aggression toward Ukraine in 2014.
Mapping the World’s Busiest Air Routes
Flying can get you almost anywhere, but often people are journeying between two popular destinations. Here we map the busiest air routes globally.
Mapping the World’s Busiest Air Routes
Modern air travel gives us almost unlimited possibilities for getting around.
Whether you are acting on your wanderlust to explore new and exotic destinations, hopping to a familiar island for a well-deserved vacation, or jetsetting to London in the comfort of business class, the modern airline industry can get you almost anywhere you need to go.
But while flying allows us to have unique experiences, it’s often the case that we are all coming and going from many of the same popular destinations. As a result, the world’s busiest air routes have hundreds of flights per day connecting important city pairs together.
Ranking City Pairs
Today’s chart pulls data from OAG, which has compiled a detailed report ranking the busiest domestic and international air routes from around the globe.
It’s worth noting that the data is over the period of March 2018 to February 2019, and it excludes carriers that operate fewer than 500 routes per year.
Let’s dive in to see which city pairs have the most air travel between them.
Domestic routes are far more popular than international routes globally. According to the report, there are 15 domestic routes that have more operating flights per year than any international route anywhere.
Here’s a look at the top 10 domestic routes:
|Rank||Country||City Pair||Flights (Annually)||Carriers|
|#1||🇰🇷||Jeju ↔️ Seoul||79,460||7|
|#2||🇦🇺||Melbourne ↔️ Sydney||54,102||4|
|#3||🇮🇳||Mumbai ↔️ Delhi||45,188||6|
|#4||🇧🇷||São Paulo ↔️ Rio de Janeiro||39,747||3|
|#5||🇯🇵||Fukuoka ↔️ Toyko||39,406||4|
|#6||🇻🇳||Hanoi ↔️ Ho Chi Minh City||39,291||3|
|#7||🇯🇵||Hokkaido ↔️ Tokyo||39,271||4|
|#8||🇮🇩||Jakarta ↔️ Surabaya City||37,762||6|
|#9||🇺🇸||Los Angeles ↔️ San Francisco||35,365||5|
|#10||🇸🇦||Jeddah ↔️ Riyadh||35,149||5|
The busiest domestic route might be a surprise, unless you are familiar with Asian geography.
With almost 80,000 annual flights, the 300-mile hop between Seoul and Jeju Island in South Korea is the busiest air route in the world by a large margin. Overall, there are seven carriers competing on it each day, with over 200 daily flights available between them.
What makes Jeju so popular?
Known as the “Hawaii of South Korea”, this volcanic island is an extremely popular vacation destination within the country, and it hosts roughly 15 million guests per year.
On an international basis, the busiest route has almost 50,000 fewer flights per year than the Jeju-Seoul city pair listed above. Not surprisingly, this route – and many other top international routes – are also located in the Asia Pacific region.
|Rank||Countries||City Pair||Flights (Annually)||Carriers|
|#1||🇲🇾🇸🇬||Kuala Lumpur ↔️ Singapore||30,187||8|
|#2||🇭🇰🇹🇼||Hong Kong ↔️ Taipei||28,447||5|
|#3||🇮🇩🇸🇬||Jakarta ↔️ Singapore||27,046||7|
|#4||🇭🇰🇨🇳||Hong Kong ↔️ Shanghai||20,678||5|
|#5||🇮🇩🇲🇾||Jakarta ↔️ Kuala Lumpur||19,741||8|
|#6||🇰🇷🇯🇵||Seoul ↔️ Osaka||19,711||8|
|#7||🇺🇸🇨🇦||New York (LGA) ↔️ Toronto||17,038||3|
|#8||🇭🇰🇰🇷||Hong Kong ↔️ Seoul||15,770||9|
|#9||🇹🇭🇸🇬||Bangkok ↔️ Singapore||14,698||5|
|#10||🇦🇪🇰🇼||Dubai ↔️ Kuwait||14,581||4|
The short hop between Singapore and Kuala Lumpur takes only one hour, and it connects two major Southeast Asian commercial hubs. The route has 41 flights per day between eight airlines, making it one of the most competitive routes globally.
The busiest international route outside of the Asia Pacific is between Toronto and New York (LaGuardia) with 17,038 annual flights. Interestingly, it only has three competing carriers – the lowest of any of the top 10 routes.
Visualizing Africa’s Free Trade Ambitions
The Gambia recently became the latest country to ratify the African Continental Free Trade Area (AfCFTA), helping the landmark agreement reach critical mass to move forward.
Visualizing Africa’s Free Trade Ambitions
A united African continent working towards common goals would be a major force on the global economic stage.
To this end, nations in the region have been working towards an ambitious plan to create the world’s largest trade area. The Gambia recently became the latest country to ratify the African Continental Free Trade Area (AfCFTA), helping the agreement reach critical mass to move forward.
Today’s graphic helps put the region – and the status of AfCFTA – into perspective.
The Patchwork Problem
One key to unlocking the region’s economic potential is making it easier for Africa’s 55 countries to trade with one another.
Currently, Africa is a patchwork of regulations and tariffs, and trade between countries has suffered as a result. For example, only 10% of Nigeria’s annual trade activity is with other African countries. This is a surprising given the country’s dominant economic standing and location firmly in the center of the continent.
As a whole, Africa’s intra-continental trade level hovers at just around 20%, while nations in Europe and Asia are at 69% and 59%, respectively. Clearly, there is a lot of room for growth.
What is AfCFTA?
AfCFTA is the biggest free trade agreement since the establishment of the World Trade Organization.
The objective of the agreement is to create a single continental market for goods and services, with free movement of business people and investments.
Last year, 44 African leaders signed an agreement to ratify AfCFTA, with half that number needed to move the agreement forward. Earlier this week, The Gambia was the 22nd country to announce that its government has ratified the agreement, meeting the threshold to officially put the wheels in motion.
We have witnessed a historic moment for the African Continent. AfCFTA is now set to become operational within
the month, creating a single continental market for goods
– Mark-Anthony Johnson, CEO, JIC Holdings
The good news for the agreement is that many of Africa’s largest economies – including Egypt and South Africa – are already on board. There is, however, one significant holdout.
The Elephant in the Room
Even though the threshold for pushing AfCFTA forward has been reached, Nigeria’s lack of commitment is still a major blow to the strength and credibility of the agreement.
Nigeria’s situation is complicated. The country’s economic prospects are bright, and Lagos is on a trajectory to become the world’s largest city over the next few decades. On the other hand, there is fierce opposition from labor unions, and the country is home to largest concentration of people living in extreme poverty in the world.
[AfCFTA is] an extremely dangerous and radioactive
neo-liberal policy initiative.
– Ayuba Wabba, President of NLC, Nigeria’s largest labor union
While the majority of African nations appear to be on board with the plan to enact AfCFTA, it remains to be seen whether Nigeria comes along for the ride or decides to go it alone.
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