Dollar Falls 0.37% to 101.34 as Democrats Win Congressional Elections
Key Facts
The U.S. dollar fell during the November 4 session after Democrats secured a decisive victory in the midterm congressional elections, according to a Reuters report. The dollar index dropped 0.37% to 101.34, while the euro rose 0.5% to $1.1249 and sterling gained 0.37% to $1.3464. The shift in currency markets came amid a broader retreat in U.S. stocks, as investors worried about the political result's implications for the technology and artificial intelligence sectors. Reuters said the dollar “fell after the Democrats’ decisive victory” in the election. EL7 data showed the index closed at 101.17 on November 3, after 101.67 on November 2, while sterling closed at 1.34606 against the dollar on November 4, compared with 1.34137 the previous day.
Investors’ concerns centered on the possibility of increased regulatory scrutiny of AI and technology companies, and what that could mean for investments tied to data centers and artificial intelligence. Reuters linked the stock selloff, particularly in AI-related shares, to concerns about tighter oversight and the possibility of political gridlock in Washington. The agency said investors “sold stocks, particularly those linked to AI,” putting the dollar under pressure. In trading, Nasdaq futures fell more than 2% before trimming their losses to 0.8%. The move toward U.S. Treasuries lifted demand for the bonds, pushing the 10-year yield down 6 basis points to 4.906%.
The dollar hit a one-month low, according to another Reuters report, as investors reassessed the effect that potential tighter regulation of the AI sector could have on U.S. growth. The report said falling Treasury yields and investor demand for safe-haven bonds weighed on the currency, alongside the balancing of possible political gridlock in Washington. Traders also pared their bets on interest rate hikes in the following year. An OCBC currency strategist said the market move was consistent with concerns about increased scrutiny of AI, and that regulation could raise concerns about U.S. growth. He added that passing federal legislation could be difficult given the president’s veto power.
In the labor market, U.S. Bureau of Labor Statistics data showed job openings totaled 7.523 million in September 2026, a rate of 4.5%; the reading was preliminary. A year earlier, job openings totaled 7.169 million in September 2025, while the rate stood at 4.3%. The figures put the September reading above its year-earlier level, with the job openings rate up 0.2 percentage points. The available data did not provide a verified figure for August. Carol Kong, a currency strategist at Commonwealth Bank of Australia, said investors’ focus would shift to underlying economic factors after the election. She said continued strength in U.S. data could support further rate hikes, which could bolster the dollar.
Attention is turning to the Bank of England, which was scheduled to publish its monetary policy summary, Monetary Policy Committee meeting minutes and Monetary Policy Report on Thursday, November 5, at 12 noon UK time. These materials offer a near-term milestone for tracking the path of British monetary policy, alongside sterling’s rise in the November 4 session. The available data do not establish an expectation of a British rate hike, leaving the decision and the committee’s guidance as the focus when the materials are published. In the United States, minutes of the Federal Open Market Committee meeting held on October 27 and 28 are due on November 18. The Federal Reserve has also set November 25 as the publication date for the Beige Book. These upcoming dates put monetary policy and economic data at the center of what investors will be watching after their initial reaction to the election result.