- The greenback eased. The dollar index fell 0.06% to 101.41 after a 0.36% drop the prior session, while the euro rose 0.12% to $1.1241, as CNBC reported after Democrats won large majorities in both chambers.
- Bonds and stocks liked the clarity. The result spurred gains in U.S. Treasuries and equities worldwide by easing contested-result fears and raising the odds of Washington gridlock that could curb further Iran strikes, National Australia Bank’s Ray Attrill told CNBC.
- Fed pricing barely budged. CME FedWatch still put an 81.2% chance on at least a 25-basis-point hike at the December meeting, up from 77.4% the prior session, even as lower yields weighed on the dollar.
- Jobs data stayed firm. ADP showed private payrolls rose 86,000 in October versus a 69,000 Reuters estimate, with Friday’s official payrolls report still ahead. Bitcoin rose 0.60% to about $80,661 on the session.
What Happened?
Democrats’ midterm sweep cleared a major source of political uncertainty and fueled a rally in global equities, while the dollar edged lower. The dollar index slipped 0.06% to 101.41 after falling 0.36% Wednesday, and the euro gained 0.12% to $1.1241, CNBC reported. Ray Attrill of National Australia Bank said the outcome raises prospects of gridlock in Washington and lowers expectations that President Trump will resume military strikes against Iran — moves that help explain softer yields and a weaker dollar. Markets still priced an 81.2% chance of a December Fed hike of at least 25 basis points, per CME FedWatch, little changed in direction from the prior session. Separately, ADP showed U.S. private employers added 86,000 jobs in October, above the 69,000 estimate, keeping labor data in focus ahead of Friday’s government payrolls report. Bitcoin gained 0.60% to $80,660.59.
Why It Matters?
FX and rate markets are pricing a divided Washington that may constrain new spending and Iran escalation, which has supported Treasuries and pressured the dollar. With Fed hike odds still high into December, any soft payrolls print could extend the dollar’s slide and keep risk assets bid — while a hot print would reassert rate-hike pressure on both bonds and crypto.
What’s Next?
Watch Friday’s U.S. nonfarm payrolls for a fresh Fed signal, and whether the dollar index holds below the post-election levels as Treasury yields stay near eight-week lows.
Affected Tickers and Coins: UUP, TLT, SPY, BTC
Source: CNBC
