Dollar stays soft as midterm fallout turns to Iran war and tariffs

The dollar stayed on the back foot as the US election post-mortem shifted to the Iran war and tariffs. Investing.com reports the dollar edged lower as the US election outcome cheered global markets, extending the slide that followed the Democratic sweep of Congress.

What moved and why

The political story moved on after the results. According to investingLive, President Trump said the election loss was largely a result of the Iran war, while adding that it was worth it. The same outlet notes that JD Vance also blamed the war.

Democrats are already setting an agenda. investingLive reports that House Democratic leader Hakeem Jeffries says Democrats will pursue a bill to stop tariffs and end the Iran war, alongside healthcare measures.

Oil took the hit. investingLive's Americas wrap describes oil as "crushed" as Republicans blamed the war for the loss. The outlet also flagged a line of thinking that Trump may look to wrap up the war. EIA crude inventories fell 865K barrels against an expected 877K build.

Risk assets broadly welcomed the outcome. Our sister site covers how crypto fear faded to neutral after the midterms.

The majors in the fixings

The latest ECB reference rates are still from 4 November, the day of the dollar's drop. They are official fixings, not live quotes.

Over five fixings since 28 October, the EUR/USD fixing is up 1.2% and GBP/USD up 1.6%. USD/CHF is down 1.82% over the same span. USD/JPY barely moved.

Central banks and data in the news

United States. investingLive's wrap lists the rest of Wednesday's data. ADP employment rose 86K against 65K expected. The September trade deficit was $105.0 billion versus $108.0 billion expected. ISM services came in at 54.5 against 54.8 expected, and investingLive reported no dollar reaction to that release.

Euro area. Investing.com reports that Deutsche Bank sees lower policy risk supporting the euro, with the debt ceiling in focus. Separately, the ECB said its wage tracker suggests slightly higher wage growth in the first three quarters of 2027 than in full-year 2026.

Australia. investingLive reports the trade surplus jumped to A$2.8 billion, a seven-month high, on LNG and metals. The outlet calls this modestly supportive for the Aussie but unlikely to shift RBA expectations on its own.

Japan. The services PMI edged up to 51.7, but the composite slipped to a five-month low as hiring slowed, according to investingLive. It judges the data unlikely to shift December BoJ pricing materially.

Canada. The September trade surplus was C$5.35 billion versus C$4.1 billion expected, per investingLive.

What to watch next

• Iran war policy. Any sign that the White House moves to wind down the war, which investingLive says some expect.
• Democratic legislation. Jeffries' planned bill on tariffs and the Iran war.
• US debt ceiling. Flagged by Investing.com in the Deutsche Bank euro note.
• BoJ minutes. investingLive says the yen is more sensitive to the minutes and oil-driven inflation signals than to the PMI.
• Next ECB fixing. The 5 November reference rates will show whether the dollar's slide held.