Dollar edges up as markets see higher odds of Clinton win

Tue Nov 8, 2016 7:16pm EST
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By Shinichi Saoshiro

TOKYO (Reuters) - The dollar tiptoed higher early on Wednesday, adding to overnight gains, as markets put a higher chance on Democrat Hillary Clinton winning the U.S. presidential election.

The prospect of a victory by Republican Donald Trump took a knock with a projection that Clinton could take the key swing state of Florida. Overnight, data firm VoteCastr favored the Democrat candidate in a number of key battleground states.

The Mexican peso and the Canadian dollar rose against the U.S. dollar on improved bets for a Clinton victory.

The two currencies, particularly the peso, had suffered deep losses when the likelihood of a Trump victory appeared higher. Trump has pledged to renegotiate the North American Free Trade Agreement (NAFTA) with Mexico and Canada, a move that could damage the economies of the export-heavy nations.

The dollar was up 0.1 percent at 105.200 yen JPY=, creeping back toward a three-month high of 105.540 struck late in October. It fell to 102.550 against the yen last week when polls suggested a tightening U.S. election.

The euro dipped 0.2 percent to $1.1005 EUR=, putting further distance from a four-week high of $1.1143 seen on Friday.

The greenback also gained against the Swiss franc, which has also served as a safe-haven along with the yen. The dollar was up 0.4 percent at 0.9815 franc CHF= after slipping to 0.9680 on Friday, the lowest since the end of September.

"We are likely to see currencies swerve up and down today on the state-by-state Electoral College count. The market seems to have priced in a Clinton win quite significantly, but a further improvement in odds of a victory could take dollar/yen to 106," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.   Continued...

U.S. dollar notes are seen in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration