US Midterms - How will it affect the FX markets? | Forex Factory

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US Midterms - How will it affect the FX markets?

  • #1
  • First Post: Nov 5, 2018 3:16pm Nov 5, 2018 3:16pm
Yes, I know - it's a 'how long is a piece of string' question. However...

I imagine the markets are pricing in a Democrat House win as they're leading by a large margin in the opinion polls. So, when the results are revealed what affects (if any) will the following have on the FX Markets:

1. Republicans retain control of the House, and Senate.
2. Democrats gain control of the House, and take the Senate.
3. Democrats gain control of the House, Republicans keep the Senate.

Just interested in peoples opinions. And, apologies if any of the terminology is incorrect - I'm from the UK so my phrasing may be a bit odd!
  • #2
  • Nov 5, 2018 3:36pm Nov 5, 2018 3:36pm
Just found this prediction from Ebury. Could be interesting!

http://www.ebury.com/blog/ebury_post...act-fx-market/
  • #3
  • Nov 5, 2018 10:00pm Nov 5, 2018 10:00pm
Quoting plymgary
Just found this prediction from Ebury. Could be interesting! http://www.ebury.com/blog/ebury_post...act-fx-market/
Thanks plymgary. Insightful.
If u think u can, then u can!
  • #4
  • Nov 6, 2018 12:45am Nov 6, 2018 12:45am
No idea, but it might get bumpy.
  • #5
  • Nov 6, 2018 3:49am Nov 6, 2018 3:49am
We'll be seeing a lot of volatility, that's for sure. The general consensus seems to be that if the Republicans lose the elections the USD will drop, and if they win - it will rally.
  • #6
  • Nov 6, 2018 6:58am Nov 6, 2018 6:58am
If the Democrats win, there's a good chance Trump's GOP tax cuts for billionaires may get repealed and a real tax cut for the middle-class get through. Trickle-up through small business is always better than trickle-down through big business...who only buy more boats or invest in Chinese factories. Also an infrastructure bill the GOP kept squashing, might get through with Democrats and the Obama Recovery we've seen that started in 2010 will continue and Trump will still pretend he had a shred of anything to do with it.
  • #7
  • Nov 6, 2018 7:18am Nov 6, 2018 7:18am
I'm getting heavily positioned on shorting the GU but wasn't until I woke up this morning and considered what effect the midterms would have on my ongoing positions. So far, it has PA wise, gone against me, however, I view that as just more opportunity for better positions. But in the back of my mind, it could turn into a fickle playing ground. If the Dems gain control of the house, would that move the needle against the dollar since Wall Street has conferred it's blessing on the Trump administration.

Ultimately, all things strive for balance including the money supply. So... ya got me.

Here's my chart:
It helps if you view my positions as just an averaged position. The midterms can ultimately work against me where I will have to start over or it could be going for that trend line. We'll see.
Attached Image (click to enlarge)
Click to Enlarge Name: gu 11 6 18.png Size: 61 KB
Taigen Profit This Month: na
  • #8
  • Nov 6, 2018 7:36am Nov 6, 2018 7:36am
Quoting toncuz
If the Democrats win, there's a good chance Trump's GOP tax cuts for billionaires may get repealed and a real tax cut for the middle-class get through. Trickle-up through small business is always better than trickle-down through big business...who only buy more boats or invest in Chinese factories. Also an infrastructure bill the GOP kept squashing, might get through with Democrats and the Obama Recovery we've seen that started in 2010 will continue and Trump will still pretend he had a shred of anything to do with it.
I agree with you to a degree in that small business is truly the backbone of American economics. The Obama years were bland at best and the only way the Dow Jones ticked up was the free money the Feds were giving the Wall Street brokers. The stocks went up but nothing else. Lifting the restrictions--which big crony corporations depended on to keep competition away--finally released the small businesses to do what they do best; letting small business give an excellent product at the most competitive prices. That is something the entrenched welfare corporations just can't do without big daddy government. That's why the little guys are for Trump.

These midterm elections are perhaps the most important in my lifetime. There is no middle ground. People will either vote for republican, i.e. less government control, strong borders, competitive healthcare and independent lifestyle, or vote democrat, i.e. stronger social network through government, open borders, government healthcare, and a lifestyle with stronger government inclusion.

It could go either way.
Taigen Profit This Month: na
  • #9
  • Nov 6, 2018 8:26am Nov 6, 2018 8:26am
Quoting Taigen
I'm getting heavily positioned on shorting the GU but wasn't until I woke up this morning and considered what effect the midterms would have on my ongoing positions. So far, it has PA wise, gone against me, however, I view that as just more opportunity for better positions. But in the back of my mind, it could turn into a fickle playing ground. If the Dems gain control of the house, would that move the needle against the dollar since Wall Street has conferred it's blessing on the Trump administration. Ultimately, all things strive for balance including...
I'm ready to pounce on a USD/JPY long should the Republicans hold the Congress. However, I know that's improbable, so will probably end up not taking a position until later in the week.

Until then, there's some interesting NZD news this evening. Depending on how that goes, may place a AUD/NZD short? We'll see.

ETA: Will be setting my alarm for 0400GMT so I can watch all the action as it unfolds.
  • #10
  • Nov 6, 2018 8:26am Nov 6, 2018 8:26am
There is NOTHING the Republicans are doing or have done that is helping the middles-class (since they effectively controlled Congress, our money and BORDER, the last 24 years straight...since 1994). Every single thing they do benefits their billionaire donor class who wants that BORDER WIDE OPEN for cheap labor.

AND the GOP needs that border open not only to please their donors, but to scare the wits out of the dumbest voters in America who actually believe that the GOP is stopping THEIR OWN cheap labor supply. The GOP could have easily closed that border IN ONE WEEK the last 24 years by arresting and jailing the people PAYING illegals to come here and work...REPUBLICAN DONORS.

Below is what Democrats want....compared to what Republicans want...but only for the ONE PERCENT.


Which countries are best to start a business?

https://www.forbes.com/best-countrie...t/#tab:overall

Which nations create more millionaires per capita?

Inserted Video
  • #11
  • Nov 6, 2018 2:18pm Nov 6, 2018 2:18pm
lol.. .
thanks for sharing that..
Before Forex I was tall, and clean shaven. Now I am an Ewok.
  • #12
  • Nov 7, 2018 3:24am Nov 7, 2018 3:24am
I opened a long on EUR/USD after I saw the results, that was the right choice to make.
  • #13
  • Nov 7, 2018 4:34am Nov 7, 2018 4:34am
Quoting dianajs
I opened a long on EUR/USD after I saw the results, that was the right choice to make.
I didn't place any orders last night as I think the markets had correctly predicted the result and priced accordingly. Therefore, I think it might be a little choppy for a few days? I prefer longer positions so only pull the trigger if I think a market will swing.

Good luck with the position though - hopefully it'll fly up for you!

Did manage to get an order on the AUD/NZD last night though after the positive NZ news. Currently only 23 pips in profit, but I'm hoping the downward price movement will continue. Still, I've already got the SL set to BE so won't be losing any sleep!
  • #14
  • Nov 8, 2018 4:12am Nov 8, 2018 4:12am
I had closed the long at a profit, and then I impulsively opened another long at the top, which was obviously a mistake. It's been a while since I have made such a mistake, but I am determined to learn from it.
  • #15
  • Nov 8, 2018 11:55am Nov 8, 2018 11:55am
Well apparently Wall Street wasn't disappointed so not much happened. My guess the dollar will strengthen a bit but generally, the fluctuation will continue as it always does. We survived!
Taigen Profit This Month: na
  • #16
  • Last Post: Nov 9, 2018 2:53am Nov 9, 2018 2:53am
Quoting Taigen
Well apparently Wall Street wasn't disappointed so not much happened. My guess the dollar will strengthen a bit but generally, the fluctuation will continue as it always does. We survived!
For now. Until the next big news event.
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