[MARKET ANALYSIS] Dollar weakens on increasing prospects of a Democrat sweep

DXY: -0.5% Dollar is pressured as all attention is on the Midterm Election results, which have pointed to a strong victory by the Democrats, with betting markets pricing a 99% likelihood of a Democrat sweep, which has resulted in broad risk-off trade and a decline in yields, while this suggests legislative deadlock, with President Trump recently reiterating his readiness to veto bills should the Democrats take control of Congress. EUR/USD: +0.5% Benefits from the weaker dollar as prospects of a Democrat-controlled Congress could put a leash on Trump's foreign policies, while there were also recent hawkish comments from ECB officials including Nagel, who stated that a rate hike in December was very likely to be necessary, warning that inflationary pressures had been higher than expected in September and were approaching the adverse scenario. GBP/USD: +0.4% Remained firmer amid the dollar's demise, while newsflow and data for the UK remain light ahead of Thursday's widely expected BoE rate hike. USD/JPY: -0.6% Retreated back beneath the 158.00 level amid the decline in US yields and with the Japanese currency also supported by the risk supported by the risk-off mood. Antipodeans: AUD/USD Flat / NZD/USD +0.2% Antipodeans are varied, with AUD/USD flat as the risk-off mood offsets the impact of the dollar weakness, while NZD/USD briefly retreated following weak jobs data, which showed a surprise contraction in Employment Change and an uptick in the Unemployment Rate, although it has since regained composure.