November 09, 2022 10:16 GMT
USD Favoured as Results Point to Split Congress
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- Markets continue to digest the outcomes and results of the US Midterm elections, with the reaction favouring the USD, which is among the best performers in G10 ahead of the NY crossover. The results continue to lean toward an outcome in which Congress will be split between the GOP and the Democrats after a disappointing showing from Republican support.
- Trendline support in the USD Index is holding, and may have helped the rebound in the greenback so far Wednesday, with tomorrow's inflation print likely critical for the short-term direction. Support crosses at 109.310.
- GBP underperforms after a bout of selling pressure put EUR/GBP through the early November highs to print the best levels since mid-October. 0.8829 marks the next resistance for the cross, the 38.2% retracement for the September - November downleg.
- GBP and NZD are the session's poorest performers, while USD and CHF strength completes the risk-off backdrop.
- US and Canadian data releases are few and far between Wednesday, with focus resting on tomorrow's US CPI release, at which most see inflation slowing to below 8.0% on the year. The speaker slate could be more interesting, with BoE's Haskel & Cunliffe due as well as Fed's Barkin on the docket.
Figure 1: Trendline Support Holding in USD Index