Commerzbank currency analyst Thu Lan Nguyen said political risks to the dollar could outlast the Nov. 3, 2026, U.S. midterm elections and leave investors facing higher hedging costs, FXStreet reported.
Nguyen expects no major currency-market shift over the near term or following months, according to FXStreet. She said a change in congressional control would not remove the risks posed by U.S. trade and foreign-policy decisions.
President Donald Trump has used executive orders in those areas, Nguyen said in the FXStreet account. She identified those decisions as potential threats to the dollar’s standing as a leading reserve and transaction currency. Investors who hedge dollar holdings against exchange-rate moves could face a sharp increase in that cost at any time, including after the election, she warned.
Voters will choose all 435 House seats and about one-third of the Senate on Nov. 3. In an Oct. 14 briefing, Commerzbank said its analysts considered a Democratic House and Republican Senate the likeliest result. That political forecast does not establish how the dollar will respond to the vote.
Commerzbank’s January outlook said a Democratic gain in either chamber could make governing harder and lead Trump to rely more on executive orders. The bank noted that Republicans lost 42 House seats during Trump’s first term, offering historical context for its election outlook.
The bank’s October briefing also identified monetary policy, corporate earnings, economic conditions, geopolitics and artificial intelligence investment as forces that could matter more to markets broadly than the election. EconoTimes’ earlier coverage of Commerzbank’s euro forecast described the bank’s concerns about U.S. political risks to the dollar.
Nguyen gave no estimate for a potential increase in hedging costs. The next scheduled event is the Nov. 3 election, when voters will decide the makeup of both chambers of Congress.
