TLDR: Democrats have swept Congress, and by a bigger margin than the bare minimum they needed. The US Dollar took a hit, and the Kiwi Dollar was one of the biggest winners, climbing to about 56 US cents (mid-market rate). But it's mostly about the US Dollar being weak, not good news at home. And with New Zealand's own election on Saturday, the NZD has two elections to deal with this week.

The US midterms are done and dusted, and if you've got a US trip coming up (or some leftover bucks in a drawer), you're probably wondering what it means for your travel money. Here's what happened, how the New Zealand Dollar reacted, and what to keep an eye on next.

The low down:

• The result: Democrats have won both the House and the Senate.
• The House: NBC projects about 258 Democratic seats, the party's widest margin since 1993.
• The Senate: Democrats took enough seats off the Republicans to wipe out their 53-47 lead.
• Wall Street: US shares rallied after the result, with the Dow up about 3%
• The Kiwi Dollar: rose to about 56.28 US cents on Thursday morning, up from 55.93 the day before.
• Closer to home: the RBNZ (New Zealand's central bank) surprised markets by holding rates last week, and New Zealand's election is on Saturday 7 November.

What happened in the US midterm elections?

Democrats didn't just win, they won big. NBC projects they'll end up with about 258 seats in the House, and they only needed 218 to take control. In the Senate, Democrats took at least four seats off the Republicans, including some in states that usually vote Republican, which was enough to reach the 51 seats they needed to take over, according to the Associated Press (AP), the news agency that officially calls US election results. NBC counts seven seats changing hands, including Texas, Ohio, Iowa and Maine.

The counting isn't quite finished, though. When we last checked, the Associated Press hadn't yet declared a winner in Alaska and Mississippi, the last two Senate races still up in the air. The final House numbers could also shift by a few seats either way.

How did the New Zealand dollar react to the midterm results?

It happened in two stages. First, the US Dollar took a hit. As early results rolled in, investors got nervous, sold shares and US Dollars, and parked their money in safer US government bonds. That sent the USD down sharply against most major currencies. The USD index fell to its lowest level in more than a month.

The New Zealand Dollar got a lift. It climbed about 0.9% to around 56.4 US cents, making it the strongest major currency on the day. Then Wall Street found its confidence again. Once the result was clear and the uncertainty was gone, US shares bounced back, with the Dow jumping about 3%. By Thursday morning, the kiwi was at about 56.28 US cents.

Here's the interesting bit: the NZD rose even though New Zealand's own jobs data was grim. The unemployment rate rose to 5.7%, its highest since 2015. Analysts say the Kiwi Dollar's gain was about the US Dollar being weak, not about good news at home. 

Here's how it stacks up against what analysts expected before the election:

Why did the NZD rise when New Zealand's jobs data was weak?

Because the US Dollar did most of the heavy lifting. The NZD first slipped after the jobs report, then rose as USD selling spread across the market. Hopes of progress in talks with Iran also took some of the safe haven shine off the US Dollar. In other words, the NZD is going up because the US Dollar is going down, not because New Zealand is doing better.

One more election: New Zealand's own

New Zealand votes on Saturday 7 November. Polls point to a close race, and analysts say that kind of uncertainty can weigh on the NZD, because investors don't know what policies might come next. 

The RBNZ has added to the uncertainty. It surprised markets by holding interest rates last week, with four policymakers voting to hold and three voting for a hike. Commerzbank called it 'more of a pause than a dovish pivot', which means it doesn't see it as a sign that rates are heading down. But after the weak jobs figures, markets now think another hike is less likely. 

What happens next for NZD/USD?

The experts don't all see eye to eye, but here's what they're saying:

• The US Dollar could fall further. The CBA' says a Democratic Congress is likely to rein in government spending, which could push the US Dollar lower.
• Don't expect a big shake-up. ING doesn't think the election alone will change where the US Dollar is heading, because it mostly moves with US interest rates.
• Friday's US jobs report is the next big test. If US jobs figures come in strong, the US Dollar could bounce back.
• Home-grown factors still matter. Weak New Zealand jobs, the RBNZ's pause and Saturday's election could all keep the NZD on the back foot.
• Keep an eye on political stand-offs. Democrats now run Congress, but President Trump can still block laws with his veto. ING says arguments over government funding and the limit on how much the US can borrow (i.e. the 'debt ceiling') could make the exchange rate bumpy. 

The bottom line: the US election is over, but US interest rates, the RBNZ and New Zealand's own election will probably move your exchange rate more than the next political fight in Washington.

What should Kiwi travellers do?

Don't panic, and don't try to pick the perfect moment to buy. The kiwi dollar is sitting at about 56 US cents right now (that's the mid-market rate, which is different from the rate you'll get when you buy). If you're heading to the United States soon:

• Set up rate alerts. We'll watch the NZD/USD exchange rate so you don't have to, and give you a nudge when the rate is looking good for you.
• Add Rate Move Protection to your purchase. If the exchange rate moves in your favour within the protection period, we'll refund you the difference.*
• Coming home with leftover USD? If the US dollar gets stronger, you can sell it back to us. You might even get a bonus with our Buy Back Bonus!