Edition · Wed 04 Nov 2026
Forex Desk
The Dollar Slips to a One-Month Low as Yen and Swiss Franc Lead a Safe-Haven Rally
The dollar fell broadly after Democrats won Congress, with the yen and the Swiss franc posting the biggest gains and the euro climbing to about $1.125.
Not investment advice: this article is for information only.
By Rachel · Edited by Chanan Zevin - Chief Editor and Head of Desks
Published
A broad retreat
The dollar fell against almost every major currency on Wednesday as investors reassessed the political outlook in Washington. The dollar index, which measures the currency against a basket of peers, dropped as much as 0.6 percent at one point before trading about 0.35 to 0.4 percent lower, near 101.3. That was its weakest level since late September.
A broad retreat
The move was driven in part by falling Treasury yields. As investors bet that a divided government would rein in spending and borrowing, U.S. bond yields fell, reducing the extra return that has drawn money into dollar assets.
Safe havens in demand
The biggest gains went to the traditional safe-haven currencies. The yen strengthened about 0.7 percent to roughly 157.55 per dollar, retreating from just below a key technical level near 158.60. The Swiss franc rose almost 0.8 percent to about 0.8144 per dollar.
Safe havens in demand
The euro gained about 0.5 percent to $1.1249, and the British pound rose about 0.4 percent to $1.3464. Gold, which often moves opposite to the dollar, jumped more than 2 percent.
Why the result matters for currencies
Currency traders had spent weeks positioning for the midterms. A Democratic Congress makes large new tax cuts or spending programs unlikely, which could slow the growth of federal debt. It also raises the prospect of tighter regulation of the AI industry, which has drawn huge foreign investment into American stocks.
Why the result matters for currencies
Some analysts cautioned that the near-term policy picture may not change much. The president still controls trade policy, and his decisions on tariffs and Iran will continue to move currencies as much as anything Congress does.
What to watch
The next signals will come from economic data, the Federal Reserve and any news from the Iran talks. A deal that reopens the Strait of Hormuz and pulls oil prices lower could change the inflation picture, and with it the outlook for interest rates.
What to watch
For now, the dollar's slide is a sign that markets are taking the election seriously. A political shock of this size, they seem to say, is worth a little less faith in the currency.