The dollar rose against the safe-haven Japanese yen and Swiss franc on Tuesday while the Mexican peso and Canadian dollar gained as investors upped their bets on a win for Democrat Hillary Clinton in the US presidential election. Market sources cited projections from data firm VoteCastr favouring Clinton in a number of key battleground states as moving the cluster of currencies.
A victory for Republican Donald Trump, viewed as unpredictable by investors, would be expected to drive capital into the perceived security of the Japanese yen and Swiss franc. Trump has pledged to renegotiate the North American Free Trade Agreement with Mexico and Canada, a move that could damage both export-heavy nations' economies. "The whole pro-Clinton trade in FX started to move in concert - Mexican peso, Canadian dollar, Japanese yen all went to session highs or session lows - and that's mainly because VoteCastr released projections that Florida was trending (Clinton's) way," said Boris Schlossberg, managing director of FX strategy at BK Asset Management.
"Florida has always been the main pivot in this election and the fact that she's trending strongly so far is really what it all comes down to." The dollar rose as high as 105.19 yen, its highest against the yen since October 31. It was last up 0.55 percent at 105.04 yen. The dollar gained 0.25 percent versus the Swiss franc to 0.9766 franc.
The Canadian dollar added 0.2 percent against its US counterpart and the Mexican peso rose more than 1 percent against the greenback, touching its highest since September 8.
The euro fell against the dollar, retracing early gains, and was last down 0.15 percent to $1.1021. It had earlier fallen to $1.1009, its lowest against the dollar in a week. The gains against the euro and yen helped push the dollar index, which measures the greenback against six major world currencies, to its highest level in a week. Clinton has a 90 percent chance of defeating Trump, according to the final Reuters/Ipsos States of the Nation poll released on Monday. Clinton was on track to win 303 votes in the Electoral College to Trump's 235, clearing the 270 needed for victory. She also leads Trump by about 44 percent to 39 percent, according to the poll.