The US dollar has fallen to its lowest level in a month following the Democratic Party’s reported victory in Tuesday’s midterm elections, securing majorities in both chambers of Congress.

The dollar index, which measures the currency against a basket of major currencies, dropped by 0.6 per cent to 101.27 on Wednesday, amid investor concerns that increased scrutiny of the artificial intelligence sector could slow US economic growth.

In Nigeria, the development has raised expectations that a weaker dollar could ease pressure on the naira.

At the official foreign exchange market, the naira appreciated slightly on Tuesday, trading at ₦1,346.93 to the dollar, compared with ₦1,347.94 on Monday. It remained stable at ₦1,390 in the parallel market.

However, analysts caution that a weaker dollar does not automatically guarantee sustained naira appreciation, as Nigeria’s exchange rate also depends on foreign exchange supply, oil earnings, capital inflows and domestic market conditions.