The greenback lost ground against major peers, including the euro and yen, following early midterm results that signaled potential legislative constraints on White House spending plans. Benchmark 10-year Treasury yields pulled back 4 basis points to 4.919% amid the unfolding political picture. Foreign exchange desks also digested a potential rate hike from the Bank of England and recent currency intervention in Beijing. Additionally, market participants are weighing potential Middle Eastern military actions, which could elevate oil prices and eventually reverse the greenback's decline.
Key points
Anticipation of a Democratic congressional sweep fueled currency sell-offs due to expecte…: Anticipation of a Democratic congressional sweep fueled currency sell-offs due to expected constraints on federal spending.
Potential United States military actions involving Iran could lift crude oil prices and u…: Potential United States military actions involving Iran could lift crude oil prices and ultimately bolster the dollar.
Sterling gained ground toward $1.3440 as market participants prepared for the Bank of Eng…: Sterling gained ground toward $1.3440 as market participants prepared for the Bank of England's first rate increase since August 2023.
Sources checked by our analysis pipeline: 1
The first results in the US midterm elections began trickling in, with Democratic Senator Jon Ossoff winning reelection in Georgia in the first major race to be called.
The question of whether Democrats can wrest control of Congress from Donald Trump's Republicans, though was likely still hours away from a definitive answer.
The euro firmed 0.2% to $1.1212, while the yen strengthened to 158.30 per US dollar in early trading. The dollar index, which measures the greenback against a basket of six currencies, edged down 0.2% to 101.7.
The yield on the benchmark US 10-year Treasury note fell 4 basis points to 4.919%.
"Given the Democrats are favoured right now, our expectation is that they will take control of both the House and the Senate," said Carol Kong, currency strategist at Commonwealth Bank of Australia.
"If that pans out, the US dollar could sell off further from here, because a Democratic sweep would limit government spending over Trump's term."
As of 7:30 p.m. ET (0030 GMT), US media outlets had projected winners in a handful of House races after polls…
Strong quarterly earnings driven by surging fuel margins and petrochemical performance have triggered an aggressive wave of leveraged retail and institutional buying. This unprecedented volume surge, marked by the conglomerate's sharpest single-day rally in six years, reshuffled top-tier market positioning. Analysts remain divided between locking in gains near technical resistance and accumulating for substantial long-term upside.
Bullion markets are navigating conflicting macroeconomic signals as cooling crude prices help offset pressure from a 78% likelihood of a December Federal Reserve rate hike. While ongoing Middle East hostilities maintain safe-haven attention, softening consumer jewelry demand across major global markets threatens sustained upside momentum. Consequently, institutional forecasters warn that prices could remain capped below key psychological thresholds in the near term.
Energy traders are weighing diplomatic developments in the Middle East against the political uncertainty of vote counting that will determine congressional control under President Donald Trump. While limited U.S. strikes on Iranian targets have paused, major Wall Street analysts warn that long-term disruption in Gulf production could trigger severe supply shocks. Consequently, markets are balancing immediate political distractions with long-range inflationary risks.