The U.S. dollar fell to its lowest level in more than a month on Wednesday as investors assessed the results of the midterm elections and a mixed run of economic data. The dollar index, which measures the currency against six major peers, was down 0.3% at 101.55 at 14:21 ET (19:21 GMT), after touching 101.10, its weakest level since September 30.
Associated Press projections showed Democrats winning majorities in both the Senate and the House of Representatives, although some votes were still to be counted. The results mean Democratic support will be needed for legislation to pass Congress from January. President Donald Trump will retain his veto power.
Market participants considered whether the election outcome could lead to tighter regulation of artificial-intelligence investments, including data-center construction. The source report noted that investment in AI infrastructure has supported U.S. economic growth, raising the prospect that any slowdown could weigh on the dollar.
Economic figures offered a mixed picture ahead of Friday’s nonfarm payrolls report. ADP said private employers added 86,000 jobs in October, above expectations of 67,000 and matching September’s total. Meanwhile, the Institute for Supply Management and S&P Global surveys indicated that activity in the U.S. services sector eased from September but remained in expansion territory.
The euro rose 0.3% to $1.1220, on track for its strongest session since October 15, as the dollar weakened. The move came despite data showing the eurozone’s composite PMI fell to 51.7 in October from 53.1 in September, a four-month low and below the preliminary reading of 51.9.
Sterling gained 0.4% to $1.3467, its highest level in nearly two months. Traders were cautious ahead of the Bank of England’s policy announcement on Thursday. The source report said markets were positioning for a 25-basis-point rate increase to 4%, amid persistent headline and services inflation.
Sources: Investing.com News.