The forex market is affected by geopolitical events, and that includes diplomatic tensions between countries. Twitter is an essential platform for world leaders, with 97% of all 193 UN member states having an official presence on the channel. When ideas, beliefs, and tensions with other countries are shared, this can impact the global financial markets in a matter of seconds.
Since his election in December 2016, US President Donald Trump has amassed an enormous following on Twitter, a platform on which he has been very outspoken. He regularly uses the social media channel for executive communications or global policy statements.
Strained Relationships between the US and Europe
Although the world generally avoids engaging with President Trump directly on Twitter, there have been instances when he has been addressed on the platform. In May 2018, the relationship between the EU and US reached a critical point over issues like the Iran crisis, trade tariffs and the North Korean threat. The President of the European Council, Donald Tusk, took to Twitter to voice his displeasure over US policies in the following tweet:
Looking at latest decisions of @realDonaldTrump someone could even think: with friends like that who needs enemies. But frankly, EU should be grateful. Thanks to him we got rid of all illusions. We realise that if you need a helping hand, you will find one at the end of your arm.
— Donald Tusk (@eucopresident) May 16, 2018
It is vital to remember just how vital the Iran pact is for the safety of European nations. Europe is one of the closest trading allies of the US, with trade between them valued at $1.1 trillion per year. The EU’s negative stance against White House policies will, therefore, have a significant impact on the EUR/USD relationship.
US Insulting African and South American Countries
In January 2018, President Trump made offensive statements against African nations and El Salvador. The leaders of Ghana, Botswana, Senegal, and El Salvador expressed their disappointment on Twitter. These were the words of the President of the Republic of Ghana:
The language of @realDonaldTrump that the African continent, Haiti and El Salvador are “shithole countries” is extremely unfortunate. We are certainly not a “shithole country”. We will not accept such insults, even from a leader of a friendly country, no matter how powerful.
— Nana Akufo-Addo (@NAkufoAddo) January 13, 2018
The US Leaving the Paris Accord
In June 2017, the US decided to leave the Paris Climate Accord. As a result, the French Foreign Ministry went on Twitter to urge President Trump to reconsider his decision, saying:
When that failed, the ministry went ahead and expressed outrage over the situation in the following tweet, which garnered around 19K re-tweets:
Failing diplomatic relations between countries will have a grave impact on the financial markets, making them unstable and volatile. It is interesting to see how Twitter and other social channels are playing an increasingly important role in political communication.