email:  
 
 
  
 

Wednesday, November 08, 2006

FX Daily Wake Up

Trading today has been shanghaied by the Democratic Party taking control of the US House of Representatives. While German export figures came in at an astounding gain of 6.6% and posted a strong trade surplus, this bullish news moved the market only a little. Today's largest move was a decline in the US Dollar that came preempt the election results pushing the EUR / USD to a high of 1.2805 before the greenback fought back to a low near 1.2745. This reaction in the markets looks somewhat muted, however, the true resolution of the US election may not be known until after the Thanksgiving holiday when all of the votes will be ratified. The big difference between winning only the House of Representatives and securing both the House and Senate would mean power for the Democrats to not only block some of the excess of President Bush legislative agenda, but also allow the new Congressional and Senate majority to overturn parts of Bush's policy. A reversal in tax cuts and big Government spending cuts are generally seen as a bearish signal for the US Dollar. Only time will tell the outcome. XPRESSTRADE Analyst David Hilgeman