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  • US dollar drops as investors await Georgia election results. 
  • The dollar index hits the lowest since April 2018 with Democrats gaining an early lead.

The dollar index, which gauges the greenback’s value against majors, fell to a 33-month low of 89.34 soon before press time. 

According to the Independent, exit polls in Georgia reveal record-level turnout for the two crucial runoff elections that could shift the balance of power in the US Senate from a Republican to a Democratic majority. 

Citi analysts expect Republicans to win both seats (or at least one) and retain their Senate majority and the status quo of a split congress, as per Reuters. While such an outcome would reduce the odds of the US Congress delivering a bigger fiscal stimulus, the bounce in the US dollar is likely to be tepid at best, according to Citi analysts. 

Alternatively, the dollar could take a beating if Democrats gain control of the Senate. According to Goldman Sachs, a Democrat-controlled Senate would pave the way for an additional fiscal stimulus of $600 billion on top of the recently enacted $900 billion.

As per the latest reports, Democrats have got an early lead, and Georgia is already extending the time to vote in Democrat districts. That explains the dollar’s decline to fresh multi-year lows below Monday’s low of 89.42. 

Technical levels