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 the president’s widespread prerogatives on trade) and no further fiscal stimulus," Nordea argues.