By Marc Chandler The outcome of the U.S. mid-term elections and Federal Reserve Open Market Committee meeting, coupled with the various economic reports, strengthens our base case scenario in which we expect the U.S. dollar to generally trade higher as the 2010 winds down. Many expect the dollar to decline in the wake of the $600 billion Treasury buying program of the Federal Reserve. In contrast, we emphasize the anticipatory nature of investors. The dollar's relentless decline in September and October was, in fact, the market pricing in QE2. As it became clear the Federal Reserve was going to provide more monetary stimulus, we anticipated roughly a 10% decline in the dollar that would carry the euro toward $1.40 and sterling toward $1.60. At the same time, we suspected that the dollar would not gain much traction until uncertainty around U.S. fiscal and monetary policy would be lifted by the outcome of the U.S. election and the FOMC meeting.