Dollar Up

Dollar/yen continued its overnight climb in Europe and by 0714 GMT it had got to 114.70 compared with around 113.80 when the early results pointed to another win for Bill Clinton.

Dollar/mark was a little more restrained and ran into some light profit-taking in initial European dealings, to stand at DM1.5236 after a peak of 1.5261, up from 1.5140 as the early results came in. But with the big event out of the way it remains to be seen whether the dollar can continue firm, some doubt it can.

The question mark that hangs over the dollar now stems from the fact that ahead of the election the US had a clear interest in a firm dollar policy in order to keep asset markets underpinned.

With Wall Street still in the stratosphere and the bond market very firm, it can be argued that both are overdue for a shakeout.

If there is to be a fall in asset markets, best get it out of the way early in the administration, analysts said.