In both US politics and the story of the country, yesterday was a day which was historic for many reasons, though, sadly, not all of them positive. Despite a clear Democrat win, hopes for a smooth transition away from the Trump administration were shattered amidst scenes of violence in the US capital.
Democrats Win in Georgia
The Democrats took control of the Senate following a double victory in the Georgia state run-offs. Democrats candidate Raphael Warnock became the first black leader of Georgia while Democrat candidate Jon Ossoff became the youngest person to enter the Senate since incoming president Joe Biden.
Pro-Trump Mobs Riot in Washington
Sadly, the history books will also reflect the riots which broke out in Washington as pro-Trump supporters, egged on by the President, stormed capitol hill in their thousands with a small group managing to break into the Senate where one of them was shot dead by police.
It was a grisly and unnecessary day which saw hours of violent rioting and left four dead with many countless others injured. Trump at one point addressed the mob, urging them all to go home while also calling them "special" and "brave patriots".
Trump Accepts Defeat
On the back of the historic violence and widespread condemnation of Trump's response (telling reporters he understands how the crowd feels, still clinging to accusations of electoral fraud) several members of his own party and of the White House staff resigned. Trump has now confirmed that he will step aside and allow for an orderly transition to the incoming Biden administration.
Markets are higher this morning, despite the ugly scenes in the US capitol as traders focus on the implications of the eventual "blue sweep". Democrats now have control of the White House, Senate and House of Representatives for the first time since Obama came to power in 2009.
Big Stimulus Expectations
Joe Biden has immediately pledged to introduce greater fiscal stimulus and with full control of the administration, the prospects of much broader, sweeping economic reform have greatly increased. on the back of the sad end to Trump's term in office, there are now firm expectations that Biden will look to mark the start of a fresh chapter in the US with significant policy reforms and stimulus programmes. The results should keep markets supported in the near term while the Dollar will likely remain pressured. The results could also have big implications for tech and energy stocks given the previous reforms proposed by the democrat party which it now stands a much higher chance of passing through.
The Dollar index continues to trade lower within the broad bearish channel which has described the sell off from mid summer 2020. Price has recently found support at the 89.32 level though, while below the 90.50 level, the near term bias remains bearish. to the downside, the next level to watch is the 88.32 level with the bear channel low there also.
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