The US dollar index was little changed around 101.6 on Thursday, after a 0.3% decline in the previous session, as investors continued to weigh the implications of the Democrats’ sweep of Congress for the US economy, trade policy, and geopolitical developments in the Middle East. The so‑called “blue wave” has raised expectations of lower federal spending, tax cuts, and a potential diplomatic resolution to the conflict with Iran. However, key economic and foreign policy decisions remain largely under the authority of the President.
At the same time, investors are awaiting Friday’s US jobs report for further signals on the health of the labour market. Recent data showed that private businesses added 86K jobs in October, according to the ADP report, while initial jobless claims fell to their lowest level in 57 years. Third‑quarter productivity growth also surpassed expectations. Against this backdrop, markets are pricing in roughly an 83% probability of a 25 bps Federal Reserve rate hike next month.
