Blue wave proves 'modestly bearish' for the Dollar
FXStreet · Matthew Ryan, CFA ·
The emphatic blue wave in the US midterms proved modestly bearish for the dollar on Wednesday, as we had anticipated. The moves in the greenback were contained, however, as the outcome was expected and political paralysis in Congress is likely to limit any meaningful change in fiscal policy.
The emphatic blue wave in the US midterms proved modestly bearish for the dollar on Wednesday, as we had anticipated. The moves in the greenback were contained, however, as the outcome was expected and political paralysis in Congress is likely to limit any meaningful change in fiscal policy.
Looking beyond the fiscal implications, two second-order effects now appear to be emerging: heightened Democratic scrutiny of AI, which could weigh on tech stocks, and growing congressional pressure for a faster de-escalation of the Iran conflict, which may ease safe-haven demand.
"The first has already been visible, with US equities falling sharply on Thursday, led by the tech sector. If this risk-off move extends, the dollar could catch a bid on safe-haven demand.
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