@radx good to see someone discuss the upcoming US mid-term...

@radx good to see someone discuss the upcoming US mid-term elections. I have been surprised how little discussion there has been about its potential impact on global markets considering potentially significant its impact will be depending on the possible outcomes. 

I would boil it down to 1 of 2 possible outcomes:

1. The Republicans maintain a majority. In this outcome Trump retains his ability to enact change which will continue to stimulate markets.
2. The Republicans do not maintain a majority (i.e. the Dems hold the balance of power in at least 1 of House or Senate. In this outcome the Democrats will have the ability to block new legislation which will bring change to a standstill and this will be bad for economic stimulus (in the US at least).

I will preface my FX related comments by saying up front I am not a fundamentals trader, I am a technical trader.

If you look at the weekly chart of the USD against the other 6 majors (EUR, GBP, CHF, JPY, AUD & CAD), generally the USD lost ground against all 6 in 2017 - my opinion is that is because markets were sceptical of how Trump would perform as President. However again across all 6 major cross rates the story reversed in 2018 as the US economy started to display undeniable strength, and I suspect no matter how turbulent Trump's style is, that US economic strength is at least in part attributed to the changes he has made (although it has reacted negatively at times when he appears to be going against conventional wisdom, eg. the trade war story).

So in that context, imo if the Republicans prevail then the USD will continue to display strength as the prospect of continued US economic strength brings with it the spectre of further US rate rises (despite Trump's complaints), but if the Dems gain a blocking majority of some sort, that's exactly what they will do and the USD will probably reverse course (and imo equities markets will also react negatively).

Hope that gives some context.

Cheers, Sharks