Dollar index slides to five-week low on Democratic midterm gains
Investors are weighing the prospect of a Democratic sweep of Congress, which could block Trump's economic agenda and reshape tech regulation.
The US dollar index fell below 101.5 on Wednesday, its lowest level in five weeks, as investors weighed midterm election results pointing to major Democratic gains, Turkey's state-run news agency Anadolu Agency reported.
Markets were weighing the prospect that Democrats could win control of both the House of Representatives and the Senate, which could lead to legislative gridlock.
Such gridlock could limit President Donald Trump's ability to advance his economic agenda and curb federal spending.
A complete Democratic victory could also pave the way for stricter artificial intelligence regulation and more intensive oversight of companies, potentially weighing on broader economic growth projections.
Investors were also watching for the possibility of renewed US military action against Iran after the elections, while diplomatic negotiations between Washington and Tehran remained stalled.
The dollar index tracks the US currency against a basket of major world currencies, so a fall means the dollar has weakened against them.
The US midterm elections take place every two years, between presidential elections, and determine control of all 435 seats in the House and about one-third of the Senate.
Currency movements can affect the cost of imports and the value of dollar-denominated assets held abroad, which is why traders watch the index closely.
