The recent US midterm results will come as a blow to Donald Trump despite his response to the press. The Republicans lost control of the House of Representatives to the Democrats and this will give them the ability to severely limit any new legislation being passed. The Republicans formerly had power over the senate and the House of Representatives.
Another concern for the Republicans is that the Democrats will now have control of the Intelligence Committee, this will enable them to probe deeper into allegations of collusion between those involved in the Trump Presidential campaign and the Russian Government during the election.
Is US Dollar weakness on the horizon
Despite some of Donald Trump’s controversial views, in terms of the US economy he has proved to be very beneficial. With possible limitations on policy change moving forward, this does have the potential to limit growth and in turn weaken the US Dollar.
If the Democrats do find some dirt on Trump and it leads to questions over his position this could also cause US Dollar weakness, if he were ousted I would expect to see a steep fall in Dollar value due to the political uncertainty.
Federal Reserve US interest rate decision
Yesterday saw the US interest rate decision by the Federal Reserve and rates were kept on hold at 2.25%. There is still the strong possibility of a rate hike in December which could benefit the greenback.
Brexit latest news – Pound Sterling strength
Brexit continues to have major influence over GBP/USD exchange rates. Rumours have circulated that the UK financial services sector will have access to the customs union post-Brexit and an Irish Border deal is on the cards. This did cause Sterling strength. Be wary of thinking a deal is all but sewn up however. We have seen positive Brexit news regarding the Irish Border in the past, only to be quashed by chief EU negotiator, Michel Barnier stating that Brexit negotiations have reached a complete impasse.
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