U.S. Dollar Falls Following U.S. Midterms Elections

(RTTNews) - The U.S. dollar weakened against other major currencies in the Asian session on Wednesday, as early U.S. midterm election results increased political unpredictability.

The early results showcased significant gains for Democrats in the 2026 U.S. midterm elections, threatening President Donald Trump's legislative agenda and paving the way for new investigations into his administration's policies.

It is feared that Democrats' control of both chambers of Congress will result in tighter regulations and a closer scrutiny of the tech-heavy sectors, including artificial intelligence companies. This increases the likelihood of Washington deadlock, which would restrict federal expenditure.

Meanwhile, the hawkish US Federal Reserve (Fed) views and ongoing geopolitical worries provide some support for the US dollar and assist prevent deeper losses.

Contrary to Israeli Prime Minister Benjamin Netanyahu's suggestion of an attack later this week, President Donald Trump stated on Tuesday that the US has no immediate plans to attack Iran.

A senior Iranian official told Reuters that the Strait of Hormuz will reopen only if sanctions are lifted and the US naval blockade is lifted, indicating that the geopolitical risk premium is still in effect.

Additionally, four tankers were destroyed after hitting explosives south of the Strait of Hormuz, according to Iran's Islamic Revolutionary Guard Corps (IRGC).

Nonetheless, investors are still optimistic about a possible diplomatic settlement to the US-Iran conflict. Going forward, the ADP data on private-sector jobs and ISM Services PMI will be released on Wednesday's US economic agenda.

In the Asian trading today, the U.S. dollar fell to nearly a 3-week low of 1.1263 against the euro and against nearly a 2-month low of 1.3479 against the pound, from yesterday's closing quotes of 1.1194 and 1.3415, respectively. If the greenback extends its downtrend, it is likely to find support around 1.14 against the euro and 1.36 against the pound.

Against the yen and the Swiss franc, the greenback drops to a 5-day of 157.40 and nearly a 2-month low of 0.8127 from Tuesday's closing quotes of 158.68 and 0.8208, respectively. The greenback may test support near 157.00 against the yen and 0.80 against the franc.

Looking ahead, PMI reports from major European economies and the U.K. for October and Eurozone CPI data for October are slated for release in the European session.

In the New York session, U.S. mortgage approvals data, Canada and U.S. trade data for September and PMI reports for October, U.S. ISM services employment data for October and U.S. EIA crude oil data are due to be released.