Close calls in previously safe seats
One trend seen across the US is that previously safe Republican seats are being effectively challenged. There are a range of reasons for this, including a high percentage of current senators and congressmen retiring, thus losing the incumbent advantage; high voter turnout expected to the highest since the 1960s and the reaction to the current president’s course of action. For example, in Iowa, a Cook Political Report puts the Republican representative Steve King just one point ahead of his opponent. This is a slim lead for the eight-term congressman and is the first serious challenge he’s faced since 2012. This pattern is reflected around the country, with many Republicans facing difficulties due to the tailwinds created by Trump’s policies and a lack of campaign funds. A new NBC/Marist poll puts Democrat Kyrsten Sinema six points ahead of the Republican candidate in Arizona and experts suggest that the state could play a pivotal role in changing the make-up of the Senate.
Pittsburgh shooting escalates the gun debate
The anti-Semitic massacre at the Tree of Life synagogue in Pittsburgh quickly became a political football. Anti-gun campaigners redoubled their efforts to put the question of gun control front and centre in the political conversation. It’s likely that many people were already mobilised by the earlier Stoneman Douglas high school shooting and had already made their decision, but there is the chance that this could be the final straw that sways some voters. On the other hand, those wishing to keep their current right to bear arms may double down and give the Republicans an advantage.
Immigration rules brought into focus
As the day of the elections draws closer, Donald Trump appears intent to keep the debate on the topic of immigration. The president deployed 5,200 troops to the US border with Mexico in response to the ‘caravan’ of migrants reported to be making their way across the border. Legal experts are now up in arms that he intends to prepare an executive order to end birth right citizenship in the US. This would require repealing the 14th amendment of the US constitution, which is not within the president’s power, but it may be a dramatic ploy to appeal to his supporter base given that recent polls see his approval rate dropping further in recent weeks.
What happens to the greenback after the elections?
There may be come fluctuations if the Democrats effect a “blue wave” and gain a majority in either, or both, of the houses. This is because the result is likely to be a two-year lame duck session for fiscal policy, with no further tax cuts or changes in policy on the horizon. However, perhaps seeing the way the wind is blowing, many experts believe that while this might cause an initial dip, this outcome has been largely priced in to the dollar. There are many other factors at play when it comes to the US dollar, including the actions of the Federal Reserve regarding interest rates, the ongoing tension with Iran and US-China trade tariffs; the last two remain in President Trump’s hands regardless of the outcome. It’s also important to remember that currencies do not operate in a vacuum but in relation to each other, and the outcome of key matters such as Brexit, which has implications for the pound and the euro, will also make their presence felt. The midterms may prove to be a political turning point for America, but it may take more than that to change the dollar’s trajectory.