By James Glynn and Hiroyuki Kachi
The U.S. dollar surged in early Asia trading Monday after Federal Bureau of Investigation Director James Comey said no new evidence was found to warrant charges against Hillary Clinton in the investigation stemming from her use of a private email server while in government.
Coming on the eve of Tuesday's U.S. Presidential election, the comments prompted strong gains by the greenback against the euro and yen.
"With the email issue now put to bed at least for now, it is clearly favorable for Clinton's chances at the election," said Ray Attrill, global head of currency strategy at National Australia Bank.
Key commodity currencies and barometers of global risk, the Australian and New Zealand dollar, also found support on the comments.
The British pound, already weakened by the latest Brexit developments over the weekend, fell further on the FBI news before clawing back some ground.
But the Mexican peso, highly sensitive to developments in the U.S. presidential race, headed in the opposite direction, strengthening against the greenback on the news, gaining more than 2% at one point compared with its levels late Friday.
The FBI statements have emerged as polls in the U.S. show the battle for the presidency is narrowing. The FBI investigation was viewed as a liability for the Clinton campaign, which had lost momentum in recent weeks.
The latest Wall Street Journal/NBC News poll finds 44% of likely voters support Mrs. Clinton, while 40% support Mr. Trump. Some 6% support Libertarian candidate Gary Johnson and 2% support Green Party candidate Jill Stein.
Clinton's 4-point lead is less than half the 11-point edge she enjoyed in a mid-October poll.
A victory for the Democrats Tuesday is expected to be less disruptive for markets than the alternative of a GOP-Trump win, and therefore more supportive of a U.S. interest rate increase in December.
Data Friday showed the U.S. job market strengthening. U.S. nonfarm payrolls rose slightly less than expected by 161,000 in October, but there was a net 44,000 upward revision to the previous two-months' job gains.
Market pricing currently reflects a 78% probability of an increase in the Fed-funds rate next month, the first in a year.
At 0100 GMT, the euro had fallen sharply against the U.S. dollar and was trading at $1.1101, down from $1.1115 just before the FBI comments. The U.S. dollar was at changing hands at Yen103.99, up from Yen103.37. The Mexican peso was trading at 18.68 a dollar, compared with 19.02 late Friday.
Robert Rennie, global head of currency strategy at Westpac said the FBI comments represent "incredible timing" for markets and the U.S. dollar has lifted strongly as risk appetite has recovered.
"We still are two days away from the election outcome. So there are investors who can't lower their guard," says Daiwa Securities senior FX strategist Yukio Ishizuki, adding "Mrs. Clinton could gain a great advantage from this, but many are still unsure."
The pound was at $1.2485 from $1.2518. The pound was already rattled by news of a potential parliamentary fight over Prime Minister Theresa May's plan to leave the European Union, with leaders of the U.K.'s main political parties drewing new Brexit battle lines Sunday.
Interbank Foreign Exchange Rates At 19:50 EST / 0050 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 104.02-03 103.11-12 +0.89 104.05 103.11 -13.52
EUR/USD Euro 1.1100-03 1.1139-42 -0.35 1.1141 1.1100 +2.22
GBP/USD U.K. 1.2478-80 1.2518-20 -0.32 1.2519 1.2476 -15.32
USD/CHF Switzerland 0.9733-37 0.9681-85 +0.54 0.9738 0.9683 -2.84
USD/CAD Canada 1.3383-88 1.3400-05 -0.13 1.3403 1.3383 -3.27
AUD/USD Australia 0.7670-74 0.7673-77 -0.04 0.7675 0.7669 +5.28
NZD/USD New Zealand 0.7317-23 0.7323-29 -0.08 0.7326 0.7318 +7.13
EUR/JPY Japan 115.46-50 114.85-89 +0.53 115.51 114.87 -11.71
EUR/GBP U.K. 0.8895-98 0.8898-901 -0.03 0.8900 0.8895 +20.69
EUR/CHF Switzerland 1.0806-09 1.0786-89 +0.19 1.0810 1.0788 -0.68
EUR/CAD Canada 1.4853-63 1.4927-37 -0.50 1.4932 1.4855 -1.13
EUR/AUD Australia 1.4467-77 1.4512-22 -0.31 1.4517 1.4469 -2.92
EUR/DKK Denmark 7.4406-13 7.4406-13 0.00 7.4410 7.4410 -0.29
EUR/NOK Norway 9.0521-71 9.0854-904 -0.37 9.0879 9.0522 -5.73
EUR/SEK Sweden 9.9465-565 9.9622-722 -0.16 9.9672 9.9509 +8.51
EUR/CZK Czech Rep. 26.992-7.054 26.993-7.055 0.00 27.026 27.017 +0.18
Write to James Glynn at firstname.lastname@example.org and Hiroyuki Kachi at email@example.com.
(END) Dow Jones Newswires
November 06, 2016 20:35 ET (01:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.