* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Elizabeth Howcroft
LONDON, Nov 4 (Reuters) - The U.S. dollar jumped and riskier
currencies wilted on Wednesday as early results in the
presidential election showed a tight race, surprising currency
investors who had been betting on a decisive victory for
Democrat Joe Biden.
President Donald Trump won in the key battleground states of
Florida, Ohio and Texas, dashing market hopes for a clear
result. Investors waited to see whether Trump would retain the
Rust Belt states -- Michigan, Wisconsin and Pennsylvania -- that
sent him to the White House in 2016. The dollar was up 1% =USD as European markets opened,
while the offshore-traded yuan CNH=EBS , Australian dollar
AUD=D3 and Norwegian crown NOK=D3 , which have for years
borne the brunt of Trump's protectionist policies, weakened.
"One of the few things clear so far is that we are not going
to see a Democrat landslide win as polls had suggested. That has
wrong-footed an FX market which was positioned for some
clarity," said Chris Turner, global head of markets at ING.
(For multimedia U.S. election coverage, click here https://www.reuters.com/world/us-election2020.)
At 0718 GMT, the dollar was up around 1% against a basket of
currencies, having earlier hit its highest level in more than a
month.
The dollar had fallen to a one-week low on Tuesaday on
expectations of a win for Biden. "We saw the dollar come under pressure going into the
election and we are now seeing an unwind of that," said Salman
Ahmed, head of macro and strategic allocation at Fidelity
International
While victory for Biden was seen boosting prospects for a
large U.S. fiscal aid package, it was also expected to lessen
the trade war tensions which have supported the greenback.
The euro fell 0.7% at $1.1637 to the lowest in more than
three months EUR=EBS while sterling tumbled 1% GBP=D3
The rising likelihood of a Trump re-election hurt currencies
that have been hardest hit by his trade policies, such as the
Mexican peso and the yuan, which weakened by more than 3% and
0.7% respectively.
President Donald Trump falsely claimed that he had won the
election, with millions of votes still uncounted. His rival,
Biden, said he was confident of winning a contest that will not
be resolved until a handful of states complete vote-counting
over the next hours or days. Overnight volatility gauges for euro-dollar and dollar-yen
fell however, as investors waited for clarity. They had surged
to their highest levels since March earlier this week EURONO=
JPYONO= .
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USDCNH https://tmsnrt.rs/2GpyY4j
Dollar climbs as election result looms https://tmsnrt.rs/3jT5Gc1
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