The U.S. dollar index resumed its plunge for a second straight session on Wednesday amid prospects of a Democratic sweep to both White House and Congress that could yield in larger fiscal stimulus.
The six-currency gauge dropped to a low of 89.15, the lowest level since April 2018, compared to the session’s open at 89.37.
Raphael Warnock beat the Republican candidate, Kelly Loeffler, while the other runoff is still very tight, with a slight advance by the Republican incumbent Jon Ossoff.
In the case of Democrats winning the two Senate seats, they will have full control over the two chambers, which would help Joe Biden implement his economic agenda.
Joe Biden’s plans encompass higher infrastructure spending, larger fiscal stimulus, tax increases and stricter regulations.
On the other hand, there could be further monetary easing by the Federal Reserve to move in parallel with the fiscal spending direction. This means oversupply of dollars in the market and therefore more downside pressure on the green currency.
Later in the day, Fed minutes for December 15-16 policy meeting may give guidance regarding asset purchases expansion over the course of 2021.
Also, one of the key events today will be the U.S. Congress meeting to count electoral votes and announce the winner of the 2020 Presidential election.