Dollar falls as Democrats make gains and markets await midterm results
Key Facts
The dollar fell against major currencies in the Asian session on November 4, as early results from the U.S. midterm elections showed gains for Democrats, Reuters reported. The agency said the immediate reaction included selling shares, exiting the dollar and moving into Treasuries for safety. Prediction markets showed rising expectations that Democrats would win both chambers of Congress. FXStreet quoted a rates strategist at Nomura as saying that possibility is generally negative for the dollar and positive for U.S. Treasuries. The currency move came as investors tracked the vote tally and its political implications.
In Asian trading, the dollar fell to 157.76 yen from 158.69 yen in the previous session, according to the Associated Press. The euro rose to 1.1241 dollars from 1.1194 dollars. Asian shares fell, as did U.S. futures, as markets awaited the election results. The agency’s report said recent stock market volatility was also linked to selling in technology and artificial intelligence shares, amid concerns about elevated valuations. In Japan, the Nikkei 225 fell 3.6% to 60,835.36 points, its lowest level since early May.
Available results showed Democrats leading in seven House seats, but it was too early to determine control of the chamber, the Associated Press reported. The agency said Democrats had won control of the Senate, while House results remained unresolved. This picture shows that the market reaction came as the vote count was still taking shape. Before the election, ING Group said the results were not expected to bring a structural shift in foreign-exchange markets. But it noted the dollar could face short-term pressure if Democrats controlled both chambers of Congress. This assessment ties the currency’s immediate sensitivity to the political balance of power, rather than to a confirmed structural change in the foreign-exchange market.
The dollar index had rebounded on November 3 from a session low near 101.50 points, but remained below the 102.00–102.10 range that had capped its attempts to rise, according to FXStreet. Research from DBS Group said the index had fallen back below 102 after the Federal Reserve meeting on October 28. The research added that GDP and inflation data released after the meeting had not restored momentum to the currency. In the broader market backdrop, yields on 10-year U.S. Treasuries fell to around 4.90% through November 2, as investors sought safe-haven assets during the stock sell-off. These moves provide context for the dollar’s decline in the election session, but relate to sessions and dates before November 4.
On economic data, the Bureau of Labor Statistics said U.S. job openings stood at 7.5 million in September, with the rate at 4.5%. The bureau said the level and rate had changed little from the previous period, while openings in state and local government, excluding education, increased by 104,000. The bureau published the September Job Openings and Labor Turnover Survey on November 3, but the figures date to September. The report therefore came out as markets followed the election, while reflecting the level of vacancies in an earlier period. The October survey is scheduled for release on December 1, 2026, at 10:00 a.m. Eastern time.
The political impact remains tied to the House tally, which had not been decided in the available coverage, despite the announcement that Democrats had won the Senate and flipped seven House seats. The Associated Press quoted an analyst at Edward Jones as saying the S&P 500 had posted a positive return every time in the six months following a midterm election since 1970. That describes a historical pattern cited by the analyst, not a guaranteed outcome for the current cycle. The next economic data test identified by DBS research before the election is the nonfarm payrolls report scheduled for November 6. The research said the election and the report would test whether the dollar’s loss of momentum would continue.