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Dollar gains as traders watch US vote

business Updated: Nov 05, 2008 09:15 IST

The dollar edged higher in Asian trade on Wednesday, lifted by hopes that the next US president will draw up new measures to stem the financial crisis.

The dollar rose to 99.76 yen in Tokyo morning trade, up from 99.69 in New York late Tuesday. The euro eased to $1.2942 from $1.2975 and to 129.09 yen from 129.36 yen.

Dealers kept a close watch on the US election results, hoping for an end to uncertainty over who will lead the world's largest economy, as Democrat Barack Obama took an early lead in the race for the White House.

"Obama is widely expected to win, but we are also watching how he will win," said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.

"He would bring change to the country amid an unprecedented crisis. Even if economic figures and sentiment remain grim, markets still have high expectations for the policies that he will iron out from January," he added.

But analysts said currencies may not react strongly to the result of the vote after months of turmoil on world markets.

"The impact of the election results on the market will be limited," said Credit Suisse strategist Satoru Ogasawara. "Market players are ultimately looking to see where financial markets will settle."

The euro and the British pound were also in focus ahead of expected fer McKeown at Capital Economics staked out the low lands with her forecast that rates would "fall all the way to 1.5 per cent next year," while most others were expecting the bank to go to 2.0 per cent, its current all-time low that stretched from June 2003 to December 2005.