However, after the dust settles, the buck could regain strength and move to the offensive amid positive expectations ahead of the FOMC meeting which concludes on Thursday. The fact that Democrats took control of the House of Representatives will hardly affect the Fed policy, at least in the medium term. Therefore, the will likely reiterate that the policy remains accommodative and that further progress on hiking rates is needed.
As soon as the market shifts its focus from the elections to the Fed meeting, the downside pressure on the USD could ease, which will open the way to a rebound in the greenback across the board. In this scenario, EURUSD will fail to challenge the 1.15 barrier, while GBPUSD could get back below 1.31.