It was a bit of an odd day in truth and it is likely that both sides of the House will celebrate the victory in some way. The result could certainly have been for Trump and the Republican party and they certainly won’t be happy that the Democrats now control the House of Representatives. However, the GOP did tighten their grip on the Senate and they will undoubtedly be pleased about that.
The markets see it as deadlock from here on in and Trump will have to appeal to Democrats from now on if he has any hope of pushing any policies through. That is unlikely to be easy and the supposed deadlock caused the dollar to weaken across the board. However, the stock markets see it as a way to ensure there are fewer shocks and political risks which is good for stocks, with the FTSE 100 and Wall Street both pushing higher. It will be interesting to see what happens to the dollar in the coming days, particularly whether it will continue to weaken.
After a whirlwind start to the week for America, with the midterm elections throwing up a few surprises, the action continues tonight with the Federal Reserve’s interest rate decision. Rates are expected to be kept on hold at 2.25% this time around, but a hike is expected in December. It will be interesting to see if there are any allusions to further hikes in 2019, with many expecting as many as three next year.
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