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Tommorow sees the US’ mid-term election, the expectations are that the republicans may regain control of the house. Some online market prediction polls have shown up to 90% believe Republicans will regain control. If we see a result as high as this, then I believe the solidarity shown amongst voters will boost the US dollar, at least for the short term. Last week the US economy showed it had annually grown by 2% from July-September, this positivity was short lived as the FED suggested that QE2 (Quantitative Easing – Americas Austerity Measures) will be introduced soon. This will see government bonds purchased and injected into the economy as fresh money, an effort to kick start their economy. Even with the market expecting QE2, I can only see it having a negative effect on the dollar. This backed with high unemployment and negative housing data sets quite a bleak winter for the dollar.

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