US Congressional election - Democrats take the House, Republicans strengthen hold on Senate

• Democrats gain control of the House for the first time since 2010
• Republicans cement power in Senate
• Dollar sees modest losses

The Democrats are set to control the House of Representatives for the first time in eight years when the 116th Congress meets on January 3^rd and much will depend on the agenda that they take to the capital.

Having ridden opposition to President Trump to moderate gains in the House Democratic leaders will have to decide if unremitting obstruction works as well in governing as it did in campaign. 

They will confront a larger Republican majority in the Senate and a President who can credibly claim, and no doubt will, that a loss of 34 seats (estimated) in an off year election is not a verdict on his administration but simply the ebb and flow of American politics.  The average loss for the President's party in midterm elections since 1960 has been 22 seats, but the range is large from +8 in 2002 for George W. Bush to -63 in 2010 for Barak Obama. 

The US Dollar gained initially as early returns and predictions showed the Republicans with an almost 50% chance of retaining the House.  Later and more comprehensive returns brought the Democratic chances back and the dollar slipped lower against all the majors except the Canadian Dollar which was trading within a few points of its open as the Asian session ended.

Some of the President’s most strident Congressional opponents will be in charge of major House committees with Nancy Pelosi the likely Speaker. Jerrold Nadler of New York who will chair the Judiciary Committee and Elijah Cummings who will head the  Oversight Committee have promised investigations of everything from Trump’s taxes to impeachment to whether Supreme Court Justice Brett Kavanaugh told the truth in his confirmation hearings.

The public perception of a governing party is substantially different than that of a party running for office.  Parties in power are expected to exercise that responsibility to solve problems. There are problems in plenty for Washington to confront-- immigration, health care, opioid abuse, tax cuts, trade, and a potential Supreme Court nomination or two—and both sides are expected to act to get things done.

If the Democrats spend their time and political capital pursing the President and administration figures with investigations of supposed misdeeds from long ago or attempt to reopen the Supreme Court hearings, if they do nothing but oppose the Republicans, they run a serious risk of having their new power removed in two years.