Bloomberg
Published Nov 07, 2018 11:00
Updated Nov 07, 2018 13:02
A Divided Congress Could Put the Dollar’s Bull Run at Risk
(Bloomberg) -- The dollar’s bull run against major currencies could come to an end in 2019 after the Democrats took the U.S. House from the Republicans in the midterm election.
While the outcome was largely expected, analysts at Morgan Stanley (NYSE:MS) and Credit Agricole (PA:CAGR) SA say it could lead to a gridlocked government during the rest of President Donald Trump’s term, undermining efforts to extend tax cuts and boost infrastructure spending. This could weigh on the greenback, which has outperformed all Group-of-10 peers so far this year.
For Treasuries, the result is likely to herald lower yields as the market moves to price out further stimulus, according to analysts. Here’s a roundup of analyst views:
Morgan Stanley: Bearish Dollar
Credit Agricole: Weaker Dollar
Citgroup: Buy the Dip
MUFG: EUR/USD Support at 1.13
BMO Capital Markets: Flatter Curve
Danske Bank: Still Sees 3.5%
Toronto-Dominion: EUR/USD Floor at 1.13
Written By: Bloomberg
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