Dollar Weakens Globally Post-US Midterms, Strengthens Against Shekel
Translated & summarized from Calcalist by baba
The US dollar has weakened globally following Democratic gains in US midterm elections, but has strengthened against the Israeli shekel, reaching 3.18 shekels. Analysts attribute the global dollar weakness to expectations of tighter regulation and reduced government spending under a Democratic-controlled Congress. The shekel's continued depreciation is occurring despite global currency market trends.
The story in 5 lines · by baba
- The US dollar has weakened globally after Democrats secured a House majority in US midterm elections.
- The dollar strengthened against the Israeli shekel, trading near 3.18 shekels.
- The euro rose against the shekel, trading above 3.57 shekels.
- Analysts predict stricter regulation on AI and financial markets due to Democratic control.
- Global markets saw the dollar index fall 0.5% against a basket of currencies.
Globally, the US dollar has weakened in foreign exchange markets following the Democratic Party's success in the US midterm elections, securing a majority in the House of Representatives and nearing control of the Senate. In contrast, the Israeli shekel has continued to depreciate against the dollar, with the dollar rising 0.3% to trade near 3.18 shekels. The euro also saw gains against the shekel, climbing 0.7% to trade above 3.57 shekels.
Globally, the dollar index against a basket of currencies fell 0.5% to 101.3 points. The euro rose 0.5% against the dollar to over $1.12, and the British pound gained 0.5% to just under $1.35. In Japan, the dollar dropped 0.7% to 157.5 yen.
Market analysts suggest that a Democratic-controlled Congress could lead to stricter regulations on financial markets, particularly concerning artificial intelligence infrastructure and data center development. Carol Kong, a currency strategist at Commonwealth Bank of Australia, told Reuters that the dollar might continue to decline, as a unified Democratic Congress would "limit government spending during Trump's term." Charu Chanana, chief investment strategist at Saxo, explained that the market is pricing in a larger Democratic victory than expected, which "reduces expectations for further fiscal stimulus and weighs on the dollar and stocks."
Moh Siong Sim, a currency strategist at OCBC Bank, noted that market movements reflect concerns about increased oversight on artificial intelligence in the event of a Democratic win in both houses of Congress. This is seen in the underperformance of the Nasdaq and concerns about US growth if AI regulation is tightened.
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