The dollar may rise sharply after the announcement of the election results in the United States
The upcoming mid-term elections attracted the attention of the markets as it can give a colorful answer to the question of whether the American people to support trump. Resounding victory of the democratic party could seriously undermine the initiative of the current President. The President, who is severely limited in its legislative initiatives called the “lame duck”. By the way, these were the last years of the reign of Obama.
On wall street, has its own interest. Financial institutions fear that the full control of Democrats over the two chambers (the House of representatives and the Senate) can lead to the restoration of the validity of Dodd-Frank, which restricts the activities of banks and the abolition of tax breaks last year. That is, in case of decisive victory, the markets could come under sharp pressure. That’s ironic, because two years ago, these markets were so afraid of trump, until he made his victory speech!
The dollar may turn to growth as containment initiatives of the President easy transformirovalsya in expectations of lower government spending and, consequently, lower inflationary risks.
Full control of the Republicans – on the contrary, it may be favorable to undermine the dollar. Markets are often very favorably perceive the Republicans in power, as it is associated with lower corporate taxes and increased government spending.
Observers predict (although if they more precisely after 2016?!) the victory of Democrats in the House of representatives, but the advantage of the Republicans in the Senate. This will give the Democrats the opportunity to investigate activities of the administration of the tramp, but will not allow much to restrain the lawmaking of the Republicans.
Such an outcome will cause the least fluctuations in the markets and will help them to quickly shake off the event, focusing on economic data and trade policy.
Alexander Kuptsikevich Companies,