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2026-11-05 11:18:29
[Dollar Continues to Weaken, Approaching Over One-Month Low; US Midterm Elections Eliminate Uncertainty, Boosting Global Markets] 1. The dollar index continued its decline in Asian trading on Thursday. The overwhelming victory of the Democrats in the US midterm elections eliminated a major uncertainty in the market, leading to a rise in global stock markets and weakening the safe-haven demand for the dollar. The dollar index is currently down 0.23% to 101.27; it had already fallen 0.36% in the previous trading day, hitting a low of 101.21, a new low since September 30. 2. Ray Attrill, head of foreign exchange strategy at National Australia Bank, said the election results increased the likelihood of a political deadlock in Washington and reduced market expectations for Trump to restart military strikes against Iran. He believes that the recent weakness in the bond market and the dollar can largely be attributed directly to this change. 3. Market expectations for the Fed's interest rate path have not changed much. CME Group FedWatch data shows that traders expect an 81.2% probability of the Fed raising interest rates by at least 25 basis points at its December meeting, up from 77.4% in the previous trading day. The ADP report showed that the U.S. private sector added 86,000 jobs in October, higher than economists' expectations of 69,000; the government's non-farm payrolls report will be released on Friday. 4. The dollar fell 0.3% against the yen in Asian trading on Thursday to around 157.93. The minutes of the Bank of Japan's September meeting reinforced market expectations for further interest rate hikes, with one member suggesting there was still room for faster increases. 5. The pound rose 0.16% against the dollar in Asian trading on Thursday to around 1.3491. Overnight, the pair rose as high as 1.3502, a more than seven-week high, and is on track for its sixth consecutive day of gains. The Bank of England is expected to raise interest rates later on Thursday to combat inflationary pressures from soaring energy costs, but this may dampen market expectations for multiple rate hikes next year.
