Credit Agricole CIB Research sees limited impact of today's US midterm elections on the USD.
"The outcome of the midterm elections seems less likely to alter the near-term course of the USD, as the Democrats look poised to lose their Congressional majority. While incumbent presidents usually tend to struggle at midterm elections, US President Joe Biden possibly faces an even more challenging backdrop due to surging inflation. Betting markets indeed give the Republicans close to 90% chances of retaking the House of Representatives, while also being more modest favourites in the Senate race," CACIB notes.
"It could take weeks for the final results to be known, but as long as a less favourable legislative ground in Congress makes it more difficult for the US government to unleash extra fiscal stimulus, the USD may quickly settle as the market focus swiftly shifts onto Thursday’s CPI data," CACIB adds.