The dollar fell against the yen on speculation Barack Obama’s re-election as president will boost chances the U.S. will maintain monetary stimulus policies that tend to weaken the greenback.
The euro erased gains as European Central Bank President Mario Draghi said the Europe’s crisis is affecting Germany. The U.S. currency was mixed versus its major peers as Obama defeated Republican challenger Mitt Romney, who disagreed with current Federal Reserve policy. Obama now faces the so-called fiscal cliff, $600 billion in tax increases and spending cuts set to be implemented in 2013.
“The size of the victory was perhaps at the upper end of what people were expecting, so that may mean that his negotiations with the Republicans to stop us going over the fiscal cliff might be a bit easier,” said Paul Robson, a senior foreign-exchange strategist at Royal Bank of Scotland Group Plc in London. “The idea of unchanged Fed policy is slightly supportive for equities, slightly weaker dollar, and I think that’s how people are playing it today.”
The U.S. currency depreciated 0.3 percent to 80.08 yen at 7:44 a.m. in New York after declining to 79.81 yen, the weakest level since Nov. 1. The dollar rose 0.4 percent to $1.2764 per euro after falling 0.1 percent yesterday. The euro slipped 0.8 percent to 102.20 yen…
“Monetary policy will remain loose under Obama so the dollar will be sold,” said Michiyoshi Kato, senior vice president of foreign-currency sales at Mizuho Corporate Bank Ltd. in Tokyo. “Dollar selling may not last that long as the U.S. faces the fiscal cliff.”
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