The results of Election Day have led to some confidence in regards to the U.S. dollar, which hit a seven-year high against the yen on Wednesday.
As the Republican Party took control of the U.S. Senate and increased its hold of the House of Representatives, U.S. dollar futures prices reached a total of 114.59 yen, their highest point since December 2007, according to Reuters.
Similar political results in the past have been able to inspire stock market rallies and general optimism in the market, the news source found.
The dollar's immediate future may change further through the end of the week, as the market was preparing for ADP employment figures and similar market information to be released leading up to Friday's non-farm payroll jobs report.
"We all saw this result coming, but the main thing is what the two sides decide, whether they want to co-operate and compromise or whether they are going to go back to the trenches," said Philip Marey, a Rabobank U.S.-focused economist, told the news source. "They (Republicans) have the incentive to be constructive to show to voters that they can rule the country … If they manage to cooperate it could boost the economy, especially if things can be done on areas like infrastructure."
The dollar last traded at 114.50 yen, rising 0.9 percent, Business Today reported. The dollar index also rose to its highest point in more than four years.
Risk Disclosure
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
© 2021 StoneX Group Inc. All Rights Reserved
