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What impact does the US election result have on the foreign exchange market?
1. If Obama wins, the initial reaction will still be to "moderately" buy fixed-income products, because we believe that the Fed will be encouraged to continue the QE road, and this policy will continue until the end of Bernanke's term. The stock market will be in a bloody battle. As for the foreign exchange market, we believe that shorting the yen will weaken, although in the medium term, such transactions are mainly related to Japan rather than the United States. Overall, it may have a negative impact on the dollar, although the immediate effect will not be great. The winner of the first time will be Canadian dollars; In the case of accurate positioning, the yen will also perform. Other winners are Australian dollar, New Zealand dollar and Norwegian krona, while the increase of Swedish krona may lag behind because of the stock market.

2. The fiscal cliff will become the focus (the interval may be several days to several weeks) after Obama rises in the early stage of winning the election. We will pay special attention to the composition of the House of Representatives. Before the election, * * * and the party had 240 seats and the Democratic Party 190 seats. Before the election, it was expected that the Democratic Party would regain several seats, but the Republican Party would still hold the majority. If * * * and the party maintain or consolidate their majority in the House of Representatives, they may be confident to take a tougher stance in the fiscal cliff negotiations-this will undoubtedly have a positive impact on fixed-income products, a negative impact on risk-related assets and a contradictory positive impact on the US dollar. However, the rise of the dollar is a response to the status of US Treasury bonds as safe-haven assets, not based on the view that US assets can outperform the market. If there is a risk of a downgrade of the US rating, the yen will be a big winner. Risk-related foreign exchange such as Canadian dollar, Australian dollar, Swedish krona and Norwegian krona will be hit by the downgrade of the US rating.