By The dollar languished near its lowest level in nearly three years on Thursday after Democrats won control of the U.S. Senate, clearing the way for a larger fiscal stimulus under Presidentelect Joe Biden.
Currency markets were largely unperturbed by scenes of chaos in Washington as supporters of outgoing President Donald Trump stormed Capitol Hill.
Analysts generally assume a Democratcontrolled Senate would be a net positive for economic growth globally and thus for most risk assets, but negative for bonds and the dollar as the U.S. budget and trade deficits may widen further.
The dollar index rose 0.1 to 89.444 in Asian trade, but still lay close to its overnight low of 89.206, a level not seen since March 2018.
Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo, sees the dollars fortunes split with Democrats controlling both Houses.
The dollar will remain weaker against commodity currencies like the Aussie and emerging market currencies, which benefit when risk sentiment is positive, he said.
At the same time, higher Treasury yields should benefit the dollar against the euro and the yen, because the dollar has underpriced the potential for U.S economic recovery under Biden.
The yield on the benchmark 10year Treasury note was at 1.0456 after climbing as high as 1.054 on Wednesday for the first time since the market mayhem of midMarch.
The riskier Australian dollar slipped 0.1 to 77.950 U.S. cents after touching a nearly threeyear high of…
