The US election effect

Last week, we asked traders from 45 of the largest financial institutions what they expected the FX response would be on the day after the election under different scenarios – a Bush victory; a Kerry win; or, if the result was still not known on November 3. Some talk centres around whether the Kerry fiscal/monetary policy mix may lean towards tighter fiscal policy and laxer monetary policy that in the short-term is dollar negative, but may prove positive for the dollar in the longer term if it

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