USD Weak as Democrats Take Control of Congress

Dollar remained near its weakest level in nearly three years Thursday, as Democrats taking over the Senate in the US pointed to two years of loose fiscal and monetary policy.

Democrats Jon Ossoff and Raphael Warnock have won the two Senate seats in Georgia, meaning their party is now set to have control of the White House, the Senate and the House of Representatives, meaning more stimulus measures as Joe Biden takes over administration in a few weeks.

“The outcome of the Georgia elections means a swifter and more aggressive spending package in 2021 that can help propel the recovery more rapidly, than would have been likely had the Republicans had retained their majority in the Senate. The dollar is likely to come under increasing downward pressure in this more reflationary scenario”, ING analyst James Knightley commented.

Currency markets remained relatively calm despite the night's violent protests caused by Trump’s supporters in Washington D.C., as Capitol Hill got stormed. 

By 07.55 GMT, the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% to 89.472.

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