Stocks hold gains, dollar weaker as Democrats win U.S. House

Wall Street stock futures and Asian shares held earlier gains on Wednesday after Democrats won control of the U.S. House of Representatives, boosting the party’s ability to block President Donald Trump’s political and economic agenda. The Democrats’ House win creates a clear hurdle for Republicans to easily pass legislation through both chambers of Congress, clouding the outlook for some of Trump’s key economic proposals. While both outcomes were broadly in line with market expectations, a reason markets did not sell off, the prospect of political gridlock creates some uncertainty for investors. The dollar weakened against most of its major counterparts.

In the currency market, the dollar dipped on the U.S. election results. USDJPY was 0.2 percent lower at 113.23, reversing earlier gains to one-month high of 113.82 yen. EURUSD rose 0.3 percent to $1.1467. GBPUSD pound gained 0.3 percent to 1.3140, hitting a three-week high. Sterling extended gains made the previous day on hopes of a Brexit deal breakthrough after Brexit Secretary Dominic Raab said “Thumbs Up” on his way out of a cabinet meeting. That helped sterling recovers losses following remarks from a senior member of the Northern Irish Democratic Unionist Party earlier that it looked like Britain would exit the EU without a deal.

In energy markets Oil prices were soft after a 2 percent fall the previous day, with U.S. crude futures hitting an eight-month low as Washington granted sanction waivers to top buyers of Iranian oil and as Iran said it has so far been able to sell as much oil as it needs to.

U.S. West Texas Intermediate (WTI) crude futures traded 0.5 percent lower at 61.91 a barrel having hit a low of 61.31, the weakest price since March 16.

The precious yellow metal remains largely contained within range despite twitchy investors on US mid-term elections, trading with wild swings in early Wednesday’s trading session, alternating between spikes to 1,232.00 and drops into 1,223.00.