Credit Agricole discusses the potential impact of US midterm elections on the USD.

"In a recent focus piece, we analysed the USD performance after US elections since 1976 and concluded that the FX market impact depended on whether Democrats controlled the House only, or the Senate as well. In the case of the former, the USD rebounded strongly while it sold off in the case of the latter," CACIB notes.

"Assessing the FX impact from the midterms is also complicated by two conflicting USD drivers that could play out sequentially in the coming weeks and months. In the immediate aftermath of the vote, investors will focus on any indication that the Trump administration could re-escalate the conflict in Iran and thus boost the appeal of the high-yielding, safe-haven King USD across the board. The initial USD positive impact need not last, however, if we end up with another TACO (Trump Always Chickens Out) situation. We further think that the persistent softness of technology stocks should continue to undermine the attractiveness of the safe-haven USD...All this makes us bearish on the USD in the next 6-12M," CACIB adds.