Dollar mixed ahead of US presidential results

AP FILE PHOTO

TOKYO – The dollar was mixed in Asian trade Wednesday as votes were tallied in a nail-biter US presidential election, with the greenback tipped to weaken if Barack Obama returns to the White House.

In cautious trade ahead of the official results, the dollar inched down to 80.18 yen, from 80.34 yen in New York on Tuesday.

The euro was weaker against the dollar and yen, buying $1.2788 and 102.54 yen, compared with $1.2814 and 102.96 yen in US trade.

An Obama victory is considered a dollar-selling cue and likely sparked the the unit’s weakening against the safe-haven Japanese currency, dealers said.

“A win by Obama may invite initial dollar selling, but any dip could prove limited and short-lived,” said Osao Iizuka, head of FX trading at Sumitomo Mitsui Trust Bank.

“A Romney win could strengthen risk-on sentiment and send the (dollar-yen) pair up to 81.00,” he told Dow Jones Newswires.

Early exit polls have shown Obama and his Republican rival Mitt Romney locked in a neck-and-neck race, with the market focused on exit polls in Ohio, a crucial battleground state in the presidential race.

A key question mark hanging over markets is the looming so-called US fiscal cliff, government spending cuts and tax hike measures due to take effect on January 1 unless politicians find a compromise on reducing budget deficits.

The euro’s weakening comes amid lingering concerns about the eurozone as Greece gets set to vote on austerity measures demanded by its international creditors which are key to unlocking the next tranche of a bailout.

Athens has been paralysed by mass strikes over the cuts with tens of thousands of protesters pouring into the streets of the Greek capital on Tuesday.