* Control of both Houses gives Biden scope to push agenda
* Riskier currencies seen outperforming on growth prospects
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Kevin Buckland and Stanley White
TOKYO, Jan 7 (Reuters) - The dollar languished near its lowest level in nearly three years on Thursday after Democrats won control of the U.S. Senate, clearing the way for a larger fiscal stimulus under President-elect Joe Biden. markets were largely unperturbed by scenes of chaos in Washington as supporters of outgoing President Donald Trump stormed Capitol Hill. generally assume a Democrat-controlled Senate would be a net positive for economic growth globally and thus for most risk assets, but negative for bonds and the dollar as the U.S. budget and trade deficits may widen further. dollar index =USD was little changed at 89.321 in early Asian trade on Thursday, after dipping to its lowest since March 2018 at 89.206 overnight.
The yield on the benchmark 10-year Treasury note UST10YT=RR climbed as high as 1.054% on Wednesday for the first time since the market mayhem of mid-March.
Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo, sees the dollar's fortunes split with Democrats controlling both Houses.
"The dollar will remain weaker against commodity currencies like the Aussie and emerging market currencies," which benefit when risk sentiment is positive, he said.
At the same time, "higher Treasury yields should benefit the dollar against the euro and the yen, because the dollar has underpriced the potential for U.S economic recovery under Biden."
The riskier Australian dollar was little changed at 78.025 U.S. cents AUD= after touching a nearly three-year high of 78.195 on Wednesday.
The euro EUR=EBS gained 0.1% to $1.23385, approaching the $1.2349 level it reached Wednesday for the first time since April 2018.
The dollar fell 0.1% to 102.965 yen, after dipping to 102.595 on Wednesday for the first time since March.
But after a fall of nearly 7% in 2020 for the dollar index and a drop of as much as 0.9% in the new year, the U.S. currency may get some respite from some unwinding of a crowded trade.
"People have been bearish on the dollar now for at least six or nine months," said Minh Trang, senior FX trader at Silicon Valley Bank in Santa Clara, California.
"Obviously you are going to have to take a little bit of a breather every now and then."
It last traded at $37,382. ========================================================
Currency bid prices at 9:45AM (045 GMT) Description
U.S. Close Pct Change
+103.0620 +0.0000 Euro/Yen
+127.1900 +126.9700 Dollar/Swiss
+0.8778 Sterling/Dollar GBP=D3
+1.3609 Dollar/Canadian CAD=D3
All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX
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