Dollar retreats as Democratic wins in US midterms stoke AI regulation jitters
SPY•The dollar index fell to a one-month low of 101.41 after Democrats captured majorities in both chambers of Congress, as investors weighed possible tighter AI regulation and its impact on growth. The euro rose 0.4% to $1.1236, while the 10-year Treasury yield fell nearly 3 basis points to 4.921%.
1. Dollar falls after election
The dollar tumbled on Wednesday after Democrats won majorities in both the Senate and House, prompting concerns that opposition to data centres could gain momentum and that tighter AI regulation could weigh on US growth. The dollar index fell to a one-month low and was last at 101.41.
2. Major currencies rise
The euro gained 0.4% to $1.1236 and sterling rose 0.46% to $1.3475. The dollar fell 0.38% against the yen to 158.09 per dollar and weakened 0.54% against the Swiss franc to 0.8162; the 10-year Treasury yield dropped nearly 3 basis points to 4.921%.
3. Focus on policy and risks
Strategists said the election outcome may constrain future policy, while noting that federal legislation faces a high hurdle under President Donald Trump, who holds veto power. Investors were also watching Middle East risks and the Bank of England’s policy announcement, with its committee expected to raise rates for the first time since August 2023.
