The dollar's interest-rate-driven rally is expected to survive the U.S. midterm election deadlock.

A U.S. dollar rebound may have enough momentum to shrug off the U.S. midterm elections; high interest rates and a surge in AI-related spending are attracting capital inflows. Investors believe that regardless of the election outcome, the main drivers of dollar strength are unlikely to change; currency markets are driven more by relative economic growth, inflation, interest rates and capital flows. A divided government may provide some stability to financial markets, including the dollar, while the Federal Reserve's expected resumption of rate hikes could further boost the dollar.