Split Congress may hurt the greenback

Daily Analysis - 07/11/2018

 Dollar lost versus the euro and yen


The greenback lost against the yen and euro in a wild trading session while investors studied U.S. midterm election outcomes for any early clues into the possibility of Congressional gridlock.

The Democratic Party won the control of the U.S. House of Representatives, with the Senate split.

A split Congress probably will damage the dollar but for a short period of time. The Democratic victory very important and probably is to be seen as a cancellation of President Donald Trump's plans which have boosted corporate growth. Kathy Lien, managing director of currency strategy at BK Asset Management said in a note.

"If Congress is split, with the Democrats controlling the House and Republicans the Senate, the prospect of legislative gridlock that would make it difficult for policies such as the President's middle-class tax cut to pass is negative for the U.S. dollar."

The dollar index, a measure of its value versus six major rivals, lost 0.2% to trade at about 96.11.

Gold gains on softened dollar

On Wednesday Wall Street stock futures went lightly down as Asian shares continued to be in a very tight range. As for the popular yellow metal, U.S. gold futures rose about 0.3% to $1,229.5 per ounce while spot gold was up 0.2% at $1,228.35 per ounce.

Early today Gold prices climbed amid a softer dollar, with traders anticipating the outcome of U.S. midterm elections that could take from the Republicans their Congress power.

The dollar index, which gauges the greenback versus a basket of six important currencies, went below about 0.3%, while traders awaited the U.S. election outcomes.


Oil prices went down due to supplied market

U.S. West Texas Intermediate crude futures were at about $61.75 per barrel that was about dropping 45 cents from their last close.

On Wednesday oil prices dropped, maintaining their declines from the previous trading session. Now markets are well supplied due to increasing production and U.S. gave permission to Iran's biggest customers to continue purchasing its crude.

Now Brent crude oil futures were at about $71.80 per barrel, down 28 cents, on their last close.

The frequently well-supplied market has changed its view, which until the beginning of last month was mostly bullish, forcing Brent to four-year highs of more than $86 per barrel ahead of the Iran sanctions.


European markets seen higher

Asian stock speculation was broadly confident to buy with investors analyzing the first exit polls in the latest U.S. elections .On Wednesday European stocks started with a higher open while results filtered in from the U.S. midterm elections. The FTSE 100 goes higher by about 28 points while the CAC-DEC18 started the day pretty much at the same levels of the previous session at about 5084.50.


Upcoming Events

  • Time
  • Currency
  • Event
  • Forecast
  • Previous
  • 15:30 GMT
  • USD
  • Crude Oil Inventories
  • 2.433M
  • 3.217M

This website uses cookies to ensure best possible user experience. Read more