The dollar weakened slightly on Thursday following the Democrats' decisive victory in the U.S. midterm elections. The outcome reduced political uncertainty, boosting global equities and U.S. Treasuries. The yen strengthened after the Bank of Japan's September meeting minutes hinted at further interest rate hikes, while the pound held near a seven-week high ahead of the Bank of England's expected rate increase.
Democrats secured strong majorities in both the Senate and House, easing concerns about contested results. This political shift lowered expectations for military action against Iran and contributed to a weaker dollar and lower Treasury yields. The dollar index fell 0.06% to 101.41, while the euro rose 0.12% to $1.1241. The yen gained 0.08% to 158.25 per dollar.
Despite the political changes, markets still anticipate a 25-basis-point rate hike from the Federal Reserve in December, with an 81.2% probability. The ADP National Employment Report showed U.S. private payrolls increased by 86,000 jobs in October, exceeding economist estimates. The pound climbed 0.38% to $1.3462, poised for its sixth consecutive daily gain.
In cryptocurrencies, bitcoin rose 0.60% to $80,660.59, and ether increased 0.45% to $2,428.15. The Australian dollar strengthened 0.09% against the greenback, while New Zealand's kiwi climbed 0.12% to $0.5627.