The U.S. Dollar struck a 7-year peak versus the Japanese Yen during the European trading session today following a Republican-led victory for seats in the U.S. Congress raised investors hopes that Washington’s political gridlock could finally be overcome. The outcome also helped to boost sentiment for some higher risk currencies.

The Euro, meanwhile, continues to struggle just ahead of a policy decision by the central bank, and earlier struck a 2-year trough versus the Swiss Franc, testing the floor of 1.21 Swiss Francs that the Swiss National Bank had instituted more than three years ago. Analysts believe that the SNB could be preparing to intervene, given the recent inflation data from Switzerland which showed that the deflationary threat of the Eurozone may have spread to Switzerland.

As reported at 8:51 a.m. (GMT) in London, the USD/JPY was trading at a session peak of 114.55 Yen, a level not seen in nearly seven years, before easing back to 114.40 Yen, still a gain from Tuesday trade. That helped to boost the U.S. Dollar Index which traded this week near to a 4-year high at 87.406 .DXY. The EUR/CHF fell to 1.2033 Swiss Francs, inching closer to the 1.20 Swiss Franc’s floor.

Could the ECB Surprise?

A recent media report that suggested that some European Central Bank officials were not happy with the management style of the ECB head, Mario Draghi, gave the Euro a short lift yesterday. Regardless, analysts say that they don’t expect that the ECB will put forth any new policy actions at this time, but the ECB has also been known to surprise so investors’ caution is advised.