FOREX-Dollar soggy, yen buoyant before Clinton-Trump debate

Mon Sep 26, 2016 8:30pm EDT
 
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* Dollar/yen dips to 1-month low

* Focus on how equities react to US presidential debate

* Canadian dollar hits 6-mth low vs dollar as debate looms

By Shinichi Saoshiro

TOKYO, Sept 27 (Reuters) - The dollar was on the back foot and the safe-haven yen was buoyant as caution gripped the market ahead of the closely-watched U.S. presidential debate.

Democrat Hillary Clinton and Republican Donald Trump will square off at 0100 GMT.

"The first presidential debate will not necessarily decide the entire outcome, but it could potentially bring instability to the equity markets by increasing uncertainty over who could win the election," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

"That would increase risk aversion, already higher on European banking concerns, and deal an additional blow to the dollar. We could see dollar test support at 100 yen."

While both Clinton and Trump are seen favouring a weaker dollar, some fear a Trump victory could expose the U.S. economy to more acute negative shocks with worse consequences for the U.S. dollar.   Continued...