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We will soon know the results of the US Mid-Term Elections and Democrats seem to be on track for a victory in the House. What does it mean for the US Dollar?

Here is their view, courtesy of eFXdata:

Nordea Research discusses the USD outlook in light of today’s US mid-term elections.

A hung congress would be a bad scenario for the USD, while you should expect EUR/USD to drop swiftly through the 1.13 level in case Trump and the Republicans manage to secure another 2 years with a Republican majority in both chambers.

Historically the USD has fared poorly both before and after mid-term elections which have resulted in a hung congress. while there is no significant USD-pattern around other mid-terms.

A hung congress on Tuesday will be bad news for the USD,  given lower prospects of Trump-stimuli in a hung Congress scenario. If we get a hung congress, then we should prepare for more a mix of aggressive trade rhetoric (due to the president’s widespread prerogatives on trade) and no further fiscal stimulus,” Nordea argues.

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