Democratic victory supported the euro: prospects for further growth

The US midterm elections became one of the most important political events for financial markets in early November 2026. On November 3, 2026, Americans voted for all 435 seats in the House of Representatives, as well as for 35 Senate seats (33 regular and two special elections). In addition, gubernatorial and local elections were held in several states.

The main sensation was that Democrats succeeded not only in traditionally Democratic states but also in regions that had previously been considered reliable Republican strongholds.

In particular:

• In Texas, Democrat James Talarico won the Senate seat. This is especially symbolic, since the state had supported Republicans for decades.
• In South Carolina, Democrat Annie Andrews won.
• In North Carolina, Roy Cooper won the Senate seat.
• Democrats also scored victories in Kansas, Iowa and Ohio.
• In Georgia, Jon Ossoff retained his Senate seat.

As a result, Democrats gained control of the Senate and were also on the verge of winning a majority in the House of Representatives. Thus, Republicans risk losing control of both chambers of Congress.

The main reasons for the Republican defeat were Americans' dissatisfaction with the rising cost of living, high inflation, the economic policy of the Trump administration and the situation around the war with Iran. Voters also expressed concern about corruption and the excessive concentration of power in the president's hands.

How did the euro react to the election results?

The currency market reaction was quite rapid. The US dollar began to weaken against major world currencies, while the euro received additional support.

On the morning of November 4, the EUR/USD pair rose by about 0.6%, reaching $1.1263 per euro. The DXY dollar index simultaneously fell by 0.3%, to 101.4 points.

The reasons for this reaction are quite understandable. First, the Democratic victory means that it will be significantly more difficult for Donald Trump to carry out his economic program. Opposition control of Congress can slow down the passage of new laws, tax initiatives and budget decisions.

Second, investors fear increased political confrontation in the US. Democrats intend to more actively oversee the activities of the Trump administration and conduct investigations into members of his team.

Third, additional risks for the American economy may arise if regulation of the technology sector tightens, especially for companies associated with artificial intelligence. Investors worry that this will negatively affect the prospects for US economic growth and the stock market.

All this creates preconditions for a weaker dollar and increased interest in the euro.

However, it is still too early to count on a prolonged and unimpeded appreciation of the European currency. Donald Trump retains the presidential veto right, so even a Democratic Congress will not automatically be able to implement all its initiatives. In addition, escalation of the conflict in the Middle East could once again boost demand for the dollar as a safe haven.

To what levels can the euro rise?

In the coming days, the main focus of FOREX participants will be on EUR/USD's ability to consolidate above the psychologically important level of 1.12 and overcome resistance around 1.1250–1.1260.

The technical picture allows us to identify the following targets:

Technical analysts note that the area of 1.1420 corresponds to the 100-day moving average, so overcoming it may not be easy.

At the same time, currency strategists' forecasts also assume a further gradual firming of the euro. According to a Reuters survey, the average expert forecast sees EUR/USD rising to 1.13 in three months, to 1.14 in six months and to about 1.16 in a year.

What will determine the further dynamics of the euro?

In addition to the results of the American elections, several important factors will influence the EUR/USD pair:

• Fed policy. If the US central bank is forced to ease monetary policy, this could increase pressure on the dollar.
• ECB policy. European Central Bank Governing Council member Joachim Nagel said that a rate hike might be required in December. This supports the euro.
• US economic statistics. Data on the labor market, inflation and business activity will be especially important.
• Geopolitical situation. An escalation in the Middle East could increase demand for the dollar and limit the euro's rise.

Forecast: to what level can the euro rise

The Democratic victory in the midterm congressional elections became an additional negative factor for the US dollar. In the short term, the euro may continue to strengthen, primarily toward 1.13 dollars.

If political uncertainty in the US persists and the ECB maintains a relatively tight monetary policy, the next target for EUR/USD could be the 1.14–1.15 area.

In the longer term, a return of the euro to 1.16 dollars cannot be ruled out. However, this will require a combination of several factors: further weakening of the American currency, favorable economic statistics from the eurozone and the ECB maintaining a hawkish stance.

Thus, the Democratic victory created a favorable short-term backdrop for the euro, but does not yet guarantee the formation of a stable upward trend.