Breaking: US Dollar falls below 101.50 as early midterm results point to Democratic gains

The US Dollar witnessed some selling pressure, dropping below 101.50, as early midterm election results indicated potential Democratic gains. Traders are closely watching the election outcomes for fresh market direction. Treasury yields declined across the curve, with the 2-year Treasury dropping 5 basis points to 4.566% and the 10-year yield falling 6 basis points to 4.90%.

Polling closed in several early states, with Democrats securing 124 House seats and Republicans winning 77. Additionally, Democrat Jon Ossoff won Georgia's Senate race, preventing a Trump-backed challenger. Economist Andrew Ticehurst noted a rising probability of a "blue wave," which is generally viewed as negative for the Dollar and positive for US Treasuries.

The midterm elections, held halfway through a president's term, determine which party controls Congress for the remaining two years. Historically, the S&P 500 has gained around 15% 12 months after every midterm election, with 19 out of 19 cases since 1950. Investors are awaiting the midterm results, hoping for a divided government that might curb sweeping changes in taxes, spending, and regulations.