USD weakened against its major rivals in the European session on Tuesday as investors were pricing in a potential victory for Democrat Joe Biden at the 2020 U.S. presidential election. The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, dropped 0.55% to 93.61.

Most opinion polls have indicated that the Democratic candidate Joe Biden is to defeat incumbent president Donald Trump in today's long-awaited elections. But regardless of the outcome, markets most of all want a clear winner.

A Biden win is expected to weaken the U.S. currency, as it paves the way to massive fiscal stimulus and less disruptive trade relations, boosting other currencies at the dollar’s expense.

In addition, market participants are closely monitoring the outcomes of several Senate races, which will determine if the “Blue Wave” will take over Congress. According to the RealClearPolitics, polling averages expect each party to have 50 seats in the Senate.