The US Dollar Index (DXY) saw a sharp decline during Asian trading hours on Wednesday (November 4, 2026), falling below the 101.50 level to hover around 101.25. This weakening follows early results from the US midterm elections, which indicate several victories for the Democratic Party. Uncertainty regarding the composition of Congress for the final two years of President Donald Trump’s term has prompted investors to adjust their positions in the foreign exchange market, putting downward pressure on the US dollar.
According to preliminary vote counts reported by the Associated Press (AP), winners have been projected for 60 of the 435 seats in the US House of Representatives. Of these, the Democratic Party has secured 42 seats, while the Republican Party has won 18. However, these results do not yet reflect the full scope of the contest, as the majority of seats are still being tallied. The final composition of Congress will be a primary focus for investors as they attempt to gauge the direction of the Trump administration’s economic policy.
In the Senate, the Democratic Party notched a significant win as Senator Jon Ossoff successfully retained his seat in the state of Georgia for a second term. Ossoff defeated Mike Collins, a Republican candidate backed by Trump. This victory marks a crucial development for the Democrats in their bid to gain control of the Senate. Nevertheless, the race remains ongoing, and the final election outcome is not yet certain.
From an economic perspective, a shift in control of Congress could influence US fiscal policy, including taxation, government spending, and the management of the budget deficit. Should the Democratic Party succeed in taking control of one or both chambers of Congress, several of Trump’s economic agenda items could face greater political hurdles. Such a scenario could alter investor expectations regarding economic growth, inflation, and yields on US government bonds. A decline in expectations for fiscal expansion could exert pressure on the dollar, though its direction will ultimately depend on economic conditions and Federal Reserve (Fed) policy.
Solidnews notes that the dollar’s weakness reflects an initial investor response to growing political uncertainty and a potential shift in the balance of power in Washington. If the final election results reinforce expectations for changes in fiscal policy and drive a decline in U.S. bond yields, the dollar could face further pressure. Conversely, should the election outcome differ from forecasts—or if U.S. economic data once again demonstrate strength—the dollar could still recover. The dollar’s weakness may also provide support for gold and other major currencies, as the market awaits clarity on the election results and the U.S. labor market report due on Friday.