U.S. Dollar Falls After Midterm Elections

Nov 07, 2018

The dollar was lower against other currencies on Wednesday, as Democrats gained control of the U.S. House of Representatives and Republicans remained in charge of the Senate.

The split Congress helped boost equities, while putting pressure on the dollar. The results were in line with forecasts and seen as a referendum on U.S. President Donald Trump’s term.

Despite the split, Trump tweeted that the elections were a “tremendous success.”

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.41% to 95.72 as of 11:23 AM ET (16:23 GMT).

Meanwhile the Federal Reserve starts its two-day policy meeting on Wednesday, but is not expected to announce any changes to monetary policy, ahead of a widely-anticipated rate hike in December.

The dollar fell against the Japanese yen, with USD/JPY down 0.11% 113.32. The Canadian dollar rose, with USD/CAD falling 0.10% to 1.3111.

The euro was pushed higher by the lower greenback, with EUR/USD rising 0.40% to 1.1473.

Sterling also increased to a three-week high, as optimism over Brexit talks helped it rise. GBP/USD was up 0.39% to 1.3151, not far from earlier high of 1.3161.

The kiwi surged after its unemployment rate fell to a 10-year low of 3.9% compared to 4.5% previously and the 4.4% expected. In addition, wage growth in average hourly earnings increased 1.4%. NZD/USD increased 0.77% to 0.6791 after the news, while AUD/USD gained 0.54% to 0.7283.