The dollar was essentially unchanged on Tuesday as Americans headed to the polls, as its moves were limited by investor caution about the US midterm elections and any fallout for the world's largest economy. The greenback has outperformed most major currencies this year, benefiting from the robust US economy and rising interest rates. Investors are focused on whether congressional elections could disrupt the stellar run of the world's most liquid currency.
The Democratic Party is expected to win control of the US House of Representatives, with Republicans likely to retain their majority in the Senate. A split Congress may hurt the dollar temporarily: a Democratic win in one or both chambers is likely to be seen as a repudiation of President Donald Trump and the policies which have boosted corporate growth.
That, in turn, would boost emerging market currencies hindered this year by higher US rates, in particular those currencies running big external imbalances such as Turkey, Argentina and South Africa.
The dollar index was down 1.5 basis points on the day to 96.317 against a basket of six rivals, which could suggest the market has a slight bias for a Democratic House victory.
"The market might speculate that high turnout plays more to the scenario of Democrats winning the house and Republicans winning the Senate. Otherwise this will be a quiet session until we have some more information," said Alan Ruskin, global head of currency strategy at Deutsche Bank.
The euro was slightly higher at $1.142, about 1 percent above this year's trough of $1.130 touched on Aug. 15.
Sterling sank after a senior member of the Northern Irish DUP party said on Tuesday it looked like Britain would leave the European Union without a divorce deal. But it had retraced its losses by mid-morning, last trading at $1.307.
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