EM Assets and Euro Rally as US Dollar Retreats Following Midterm Elections

Key Facts

Emerging market stocks and currencies rose as the US dollar index dropped to a level of 101.30. TradingNEWS reported that the EUR/USD pair climbed 0.6% to reach 1.1260 following the results of the U.S. midterm elections, which saw Democrats gain control of Congress.

The shift in political control triggered a selloff in the dollar and a decline in Treasury yields, improving risk appetite for emerging market instruments. This price action coincided with economic data showing ADP employment change at 86,000 and the ISM Services PMI reaching 54.5 on November 4, 2026.

Market attention turns to the release of Initial Jobless Claims in the United States on November 5, 2026. Additionally, several Federal Reserve officials, including Hammack and Barkin, are scheduled to deliver speeches on November 5, 2026, providing further cues on monetary policy.