Dollar falls and gold tops $4,000 as markets react to US midterms

Updated 4 Nov 2026, 10:30 · First published 4 Nov 2026

The US dollar has fallen and gold has jumped back above $4,000 an ounce as financial markets react to the Democrats’ sweeping victory in the US midterm elections. The pound has climbed to its highest level against the dollar in weeks.

Why has the dollar fallen?

Investors expect a Democratic-controlled Congress to block or slow down President Trump’s plans, including on tax cuts and tariffs, and that uncertainty has weighed on the US currency. Money has moved into safe havens such as gold and US government bonds, pushing their prices up and their yields down.

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Analysts at Germany’s Commerzbank said US shares, especially technology stocks on the Nasdaq, were “likely to come under pressure today”.

What does it mean for me?

Holidays and shopping: a stronger pound means you get more dollars for your money, which helps if you are booking a trip to the US or buying from American websites.

Mortgages and savings: attention in the UK now turns to the Bank of England, which announces its interest rate decision at noon on Thursday. Markets expect a rise. Read our explainer on whether rates will go up.

Pensions and investments: many UK pension funds hold US shares, so falls on Wall Street can affect their value in the short term. Experts usually advise against reacting to a single day’s moves.

Sources: MercoPress market report, Commerzbank, London Stock Exchange market news, Bank of England. This article is not financial advice. Photo: Stevebidmead / Wikimedia Commons, CC0.