By Hiroyuki Kachi
The U.S. dollar and the Mexican peso remained stronger in early afternoon Asia trade on Monday, after the FBI said no new evidence was found to warrant charges against Hillary Clinton in the investigation of her emails just two days before the U.S. election.
The announcement Sunday by the Federal Bureau of Investigation Director James Comey triggered dollar buying from earlier in the Asia session on the eve of the U.S. presidential election Tuesday.
Investors' worries have mounted since the announcement in late October that the FBI had found new evidence in its investigation of Mrs. Clinton's emails. Many currency market watchershave expected Democratic candidate Mrs. Clinton to win, which they consider will provide greater policy clarity and less uncertainty on trade negotiations.
The latest FBI comments overnight helped clear up market sentiment, taking Tokyo stocks higher. The benchmark Nikkei Stock Average was up 1.5% midday.
But investors are still nervous about the potential risks ahead of the election outcome, which is weighing down on further upside for the dollar.
"I think investors are becoming pretty much conservative," ahead of the year-end book closing, said Toshihiko Sakai, senior manager of forex and financial products trading division at Mitsubishi UFJ Trust and Banking. "I can expect they won't be able to make major moves again tomorrow," said Mr. Sakai, noting that they will likely take positions after the results.
The dollar's gains underscores a sign of how the market has again started pricing in Mrs. Clinton's victory in the U.S. presidential election, said J.P. Morgan in its morning note. "If Mrs. Clinton wins, we expect a strong possibility that the dollar will go back to the level consistent with the U.S.-Japan interest rates gap," or around Y104.00, said J.P. Morgan. "There may be some overshooting, but the dollar's upside momentum against the yen will likely be limited."
The dollar maintained earlier gains against the Japanese currency after rising more than 1% in early Asia trade. After briefly touching as high as 104.53, its highest since Nov. 2, the greenback was changing hands at Y104.39 around 0450 GMT. That compared with Y103.10 late Friday in New York.
The euro softened to $1.1041 in early morning Asia session before bouncing back to $1.1083 midday. The common currency was at $1.1142 late Friday.
The WSJ Dollar Index, a measure of the U.S. dollar against a basket of major currencies, was up 0.40% at 87.93.
The Mexican peso, which has been highly sensitive to developments in the presidential race, extended recent gains at 18.71 a dollar midday, compared with 19.02 earlier in Asia session before the FBI headlines.
Amid improved risk sentiment on Monday, the yen was also lower against other currency peers. The euro was higher at Y115.64 midday from Y114.90, while the Australian dollar advanced to Y80.11 from Y79.15.
Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 104.38-39 103.11-12 +1.23 104.39 103.11 -13.23
EUR/USD Euro 1.1078-81 1.1139-42 -0.55 1.1141 1.1072 +2.02
GBP/USD U.K. 1.2454-56 1.2518-20 -0.51 1.2519 1.2454 -15.48
USD/CHF Switzerland 0.9758-62 0.9681-85 +0.80 0.9762 0.9683 -2.59
USD/CAD Canada 1.3383-88 1.3400-05 -0.13 1.3403 1.3374 -3.27
AUD/USD Australia 0.7673-77 0.7673-77 0.00 0.7683 0.7669 +5.32
NZD/USD New Zealand 0.7306-12 0.7323-29 -0.23 0.7329 0.7308 +6.97
EUR/JPY Japan 115.62-66 114.85-89 +0.67 115.65 114.87 -11.58
Source: Tullett Prebon
Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
(END) Dow Jones Newswires
November 07, 2016 00:34 ET (05:34 GMT)
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