^{Last updated 15 October 2026 | 5 min read}

TLDR: Probably not by much. The US midterm election on 3 November 2026 is unlikely to send the Australian Dollar to United States Dollar (AUD to USD) rate soaring, because most analysts reckon a Democratic-led or split Congress is already on the cards to happen. The one result that could potentially rattle the market is the Republicans holding both chambers, which would likely strengthen the US Dollar.  

We get it, an American election you can't even vote in isn't exactly top of mind. But if you've got a US trip booked after November (or a wad of leftover bucks sitting in a drawer), what happens in the States can affect your exchange rate and spending power. So, here's the no-fuss verdict. 

The deets:  

• When: Tuesday 3 November, US time, so we'll be waking up to results on Wednesday 4 November.
• Who's favoured: Democrats to win the House (77-91% depending on who you ask) and a slimmer lead in the Senate (56-64%).  
• Currency impact: analysts expect a fairly tame reaction. The US Dollar could go a bit softer if Democrats win, and a bit stronger if Republicans hold both chambers.  
• Where the AUD is now: hovering around 70 US cents according to mid-market rates.  
• The real boss: interest rates will probably matter more than the election itself.  

US political parties: a beginner's guide

If you need some high-level political education, here it is. US politics basically comes down to two parties: the Republicans and the Democrats. Smaller parties exist (just like in Australian politics), but they rarely get a look-in (also very similar to the Aussie polls).  

Republicans are currently in power under President Donald Trump. They're the more conservative side and generally want the federal government to play a smaller role in people's lives. Picture a Republican BBQ: it’s BYO everything – the host fires up the barbie, but you bring your own snags, and you flip them yourself.

Democrats lean more liberal and want government to play a bigger role, particularly for people who need a hand. At a Democratic BBQ, the host has catered for everyone, insists on serving, and makes sure nobody misses out on a sausage.

But we're not here to pick which BBQ we’d rather attend, we're here to talk exchange rates!  

So, what’s on the ballot?

Trump isn't on the ballot this time round, BUT the midterms are basically a referendum on how he's going – a performance review, if you will. A currently in-office president's party almost always loses ground at midterms, which is why Democrats are the fan-faves so far this year.  

Voters are choosing the next Congress, which has two chambers:  

• House of Representatives: all 435 seats are up for grabs, because members only serve two-year terms. Democrats need a net gain of about three seats to take over.  
• Senate: 35 of the 100 seats are up, as senators serve staggered six-year terms. Republicans hold a 53-47 majority and are defending 22 of the 35 seats on the ballot, while Democrats are defending 13. Democrats need a net gain of four seats to flip it. 

Who is expected to win the 2026 midterms?

Right now, the forecasters and the punters are leaning towards Democrat for the win, especially in the House. As of mid-October: 

Polymarket traders see a Democratic sweep of both chambers as the most likely outcome (about 62%), then a Democratic House with a Republican Senate (about 29%), then a Republican sweep (about 10%). The currency strategists at Ebury land in almost the same spot: roughly 60%, 30% and 10%.  

Obvious disclaimer: forecasts aren't crystal balls. The Senate is tight, and mid-decade redistricting has shaken up the House map in several states. Anyone who tells you they know exactly what's going to happen is probably selling something (or telling porky pies). 

How could the midterms affect the AUD/USD exchange rate?

Most analysts reckon it'll be a bit anti-climactic for foreign currency. A divided or Democratic-led Congress is already widely expected, so much of it is baked into prices. Here's how each scenario could play out:

If Democrats win the House but Republicans keep the Senate

A split Congress means both sides can block each other, so big new spending or tax changes get very hard to pass. Ebury reckons the dollar impact would be similar to a Democratic sweep, though budget bickering and debt ceiling gambles could make things bumpy. Another analysis points out that gridlock can spook markets, and when markets get spooked, the US Dollar often benefits as a safe haven.  

History says not to panic. After the 2018 midterms, which had the same split result, the market reaction was pretty muted. The US Dollar softened slightly and the AUD hit about 73 US cents that day. Back in 2010, the AUD gained a little after Republicans took the House, hovering around parity, before drifting back to an average of around 98 US cents within a few weeks. 

If Democrats win both the House and the Senate

This is the outcome markets think is most likely. Ebury says a clean sweep would probably be good news for the deficit, and the US Dollar could soften modestly if it calms worries about government borrowing. Another view is that it could pull US bond yields lower, which usually weighs on the dollar too.  

Plot twist: not everyone agrees. One bank reckons a Democratic House would lock in the fiscal outlook for 2027 and 2028, which could actually support risk sentiment and the USD. When the experts can't agree on which way it goes, that's a pretty good sign not to bet your holiday budget on it. 

If Republicans keep both the House and the Senate

The long shot, but it’s the one outcome that analysts think has the real potential to move the market. It would likely mean more spending, possible tax cuts, wider deficits and higher US interest rates. Ebury's gut feeling is that the dollar would rally as markets price in more Federal Reserve tightening.  

What else is moving the Aussie Dollar right now?

The election isn't the only thing pushing the AUD around. Some analysts argue the long-term direction of the US Dollar will be set by US interest rates and economic growth, not by what happens at the ballot. Meanwhile:

• The AUD is hovering around 70 US cents, with the Reserve Bank of Australia's latest meeting minutes in focus.  
• The US Dollar recently hit 18-month highs before backing off, as investors turned their attention to the Federal Reserve's next move.  
• Markets are pricing in the possibility of more Federal tightening through to late 2027, which tends to support the US Dollar.  
• Geopolitical tensions, including in the Middle East, keep the USD in demand as a safe haven.  

Case in point: in 2022, the AUD ran up towards 65 US cents ahead of the midterms, then handed some of it back as results rolled in, with US inflation data and market mood doing most of the heavy lifting.  

What should Aussie travellers do?

Honest answer: nobody knows what will happen on 3 November, or how the market will take it. So rather than trying to time it perfectly, set yourself up for all outcomes. If you're heading to the United States soon:

• Join the Travel Money Club to receive rate alerts. We'll keep an eye on the USD exchange rate, so you don't have to and give you a nudge when the AUD is favourable against the USD.  
• Add Rate Move Protection to your in-store purchase. If the exchange rate moves in your favour within 7 days, we'll refund you the difference.*
• Coming home with leftover USD? If the US Dollar gets stronger after the election, sell it back to us at any of Travel Money Oz’s 90+ stores and make the most of it. You might even quality for our Buy Back Bonus!