Lucy Meakin and Monami Yui
Nov 7, 2012
The dollar declined 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 U.S. currency fell versus 12 of its 16 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 due to be implemented in 2013. Australia’s dollar rose for a third day as stocks rallied, boosting demand for higher- yielding assets. The euro pared earlier gains as the Greek parliament prepared to vote on austerity measures.
“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 0.1 percent to 80.26 yen at 6:50 a.m. in New York after declining to 79.81 yen, the weakest level since Nov. 1. The dollar was little changed at $1.2820 per euro after falling 0.1 percent yesterday. The euro slipped 0.2 percent to 102.81 yen.