Yahoo Finance Dollar Slips as Democrats Win Back Control of House
Investing.com - The U.S. dollar slipped on Wednesday as multiple networks including Fox, NBC, CNN, and FiveThirtyEight said the Democrats won control of the House of Representatives, splitting Congress, as anticipated. The Republicans were expected to keep their majority in the Senate.
The U.S. dollar index that tracks the greenback against a basket of other currencies slipped 0.2% to 95.80 by 11:50 PM ET (03:50 GMT).
The election results are being closely watched by forex traders as indications of future U.S. economic and political policy. A split Congress usually hurts the dollar temporarily, as a democratic win in one or both chambers is likely to repudiate President Donald Trump, which may, in turn, push emerging market currencies higher. The greenback has outperformed most of its key rivals so far this year thanks to the better-than-expected economic data and higher interest rates.
"If Congress is split, with the Democrats controlling the House and Republicans the Senate, the prospect of legislative gridlock that would make it difficult for policies such as the President's middle-class tax cut to pass is negative for the U.S. dollar," said Kathy Lien, managing director of currency strategy at BK Asset Management in a research note.
Meanwhile, the EUR/USD pair advanced and traded near its daily high as the dollar retreated following the latest election results.
The USD/CNY pair gained 0.2% to 6.9316 as the People's Bank of China (PBoC) set the yuan reference rate at 6.9065 vs the previous day's fix of 6.9075.
The USD/JPY pair slipped 0.2% to 113.25.
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