Dollar opens falling, with an eye on Democratic victory in the US Congress

Attention is focused on the result of the mid-term elections in the United States, with the Democratic victory in the American Congress. Investors are also evaluating the signs that the government should send the provisional measure for the selective tax reform and the interest rate decision of the Monetary Policy Committee (Copom), which should be released after the markets close.

The Democratic victory in the US midterms takes center stage. The result was read by investors as a message against the current government of Donald Trump, and indicates that the American president may have more difficulty approving measures on public spending, taxes and regulation.

In Brazil, the focus is on the Central Bank's interest rate decision, scheduled for the end of the afternoon. The expectation is that the Copom will keep the Selic unchanged at 13.75% per year and adopt a tougher speech in response to the deterioration of the inflation scenario and greater fiscal pressure.

The progress of the tax reform is also on the radar, amid signs that the government intends to extend the collection of the Tax on Industrialized Products (IPI) in January 2027 for sectors that will be taxed by the selective tax, also known as the sin tax.

The result represents a historic defeat for Republican President Donald Trump in the midst of the mid-term legislative elections, known as midterms, held on Tuesday (3).

The party maintained its seats in the Senate and advanced over vacancies historically occupied by Republicans. The Democrats elected 20 senators, seven of them flipping, and reached 54 of the 100 seats in the House until the last update of this report. 51 seats were needed to reach a majority.

After confirming Democratic control over both Houses, President Donald Trump stated, in an interview with the American newspaper "The New York Times", that he was willing to govern with the Democrats.

Days earlier, the Republican raised doubts about his reaction to a possible defeat by stating that he would only recognize the results if the elections "were clean".

In Asia, Chinese stocks rose the most in seven months as the results of the US midterm elections gave investors an excuse to buy shares.

The SSEC, Shanghai Index, rose 2.16%, while the CSI300, which brings together large Chinese companies, rose 2.31%. In South Korea, the Kospi appreciated 0.62% and the Hang Seng, from Hong Kong, gained 1.67%. In Japan, the Nikkei fell 1.42%.