US dollar drops as midterm elections produce divided Congress

The US dollar fell against other major currencies amid market concerns that a split US Congress would affect Washington's economic policy-making over the remainder of President Donald Trump's term.

In late New York trading on Wednesday, the euro rose to $1.1454 from $1.1412 in the previous session, and the British pound increased to $1.3146 from $1.3093 in the previous session, Xinhua news agency reported.

The Australian dollar rose to $0.7285 from $0.7215.

The US dollar bought 113.34 Japanese yen, lower than 113.39 Japanese yen of the previous session. The US dollar fell to 1.0003 Swiss francs from 1.0032 Swiss francs, and it was down to 1.3099 Canadian dollars from 1.3139 Canadian dollars.

As widely expected, the Democrats seized back control of the US House of Representatives, while the Republicans managed to defend the Senate majority.

A divided Congress has led to worries that the Democrats would check GOP's efforts to extend tax cuts that had boosted corporate earnings and efforts to increase infrastructure spending.

Analysts believed that a split US Congress would add downward pressure on the dollar, as there will possibly be fewer fiscal stimulus like tax cuts and Washington's protectionist stance would remain unchanged.

--IANS

pgh/