In the Heat of the Mid-Term Elections..
Dear Friends/Fellow Traders,
If you've been keeping track of the mid-term elections in the US, then you would know that the Democrats have won a comfortable majority in the House of Representatives (Specifically 227-193). Now the Democrats are eyeing the Senate as well, with a hard-earned 49-49 tie at the moment. In the case that the Democrats does a clean sweep of both houses, then we could see some significant changes in the political realm as the Democrats will be given the power to overturn some of Bush's admistrative policies. But if the Democrats only take the House and not the Senate, then their power against Bush's policies will be very limited. However, with Bush's approval ratings in the red, the chances are in favor of the Democrats taking both houses, but we'll have to wait until all of the votes are ratified in order to get the final resolution; this will likely be after the Thanksgiving holiday as the newly-implemented technology utilized in the polling process was a little overwhelming for everybody (kind of funny, given that the US is one of the most advanced nations in the world).
What does this mean for the FX markets?
In the short-term, if the Democrats does a clean sweep of both houses, then we will most likely see the Dollar sell-off as political upheaval usually does not bode well for investors. If the Democrats only takes control of the House of Representatives, then we probably won't see much of a move in the US Dollar.
Long-term, though, I think a Democratic win would probably be more beneficial for the Dollar, as they could possibly force a change of policy in Iraq, therefore lightening on the Trillion Dollar deficit that the Bush Administration has brought upon the nation. What has this caused? Well the Dollar dropped from around 1.5 down to where it is now against the Canadian Dollar (holding at around 1.13 currently), and also lost value against all of the other major currencies. This devaluation in the US Dollar has been very hard on US consumers, as they see their hard earned dollars become more worthless by the day.
We could see a pretty big move in the US Dollar in the upcoming weeks, so position yourself!
To successful trading, Dickens
If you've been keeping track of the mid-term elections in the US, then you would know that the Democrats have won a comfortable majority in the House of Representatives (Specifically 227-193). Now the Democrats are eyeing the Senate as well, with a hard-earned 49-49 tie at the moment. In the case that the Democrats does a clean sweep of both houses, then we could see some significant changes in the political realm as the Democrats will be given the power to overturn some of Bush's admistrative policies. But if the Democrats only take the House and not the Senate, then their power against Bush's policies will be very limited. However, with Bush's approval ratings in the red, the chances are in favor of the Democrats taking both houses, but we'll have to wait until all of the votes are ratified in order to get the final resolution; this will likely be after the Thanksgiving holiday as the newly-implemented technology utilized in the polling process was a little overwhelming for everybody (kind of funny, given that the US is one of the most advanced nations in the world).
What does this mean for the FX markets?
In the short-term, if the Democrats does a clean sweep of both houses, then we will most likely see the Dollar sell-off as political upheaval usually does not bode well for investors. If the Democrats only takes control of the House of Representatives, then we probably won't see much of a move in the US Dollar.
Long-term, though, I think a Democratic win would probably be more beneficial for the Dollar, as they could possibly force a change of policy in Iraq, therefore lightening on the Trillion Dollar deficit that the Bush Administration has brought upon the nation. What has this caused? Well the Dollar dropped from around 1.5 down to where it is now against the Canadian Dollar (holding at around 1.13 currently), and also lost value against all of the other major currencies. This devaluation in the US Dollar has been very hard on US consumers, as they see their hard earned dollars become more worthless by the day.
We could see a pretty big move in the US Dollar in the upcoming weeks, so position yourself!
To successful trading, Dickens
posted by ForexDragon at 2:42 PM
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