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The dollar retreated on Wednesday as brief gains gave way to anxiety after early exit polls in the US presidential election showed the final outcome was too close to call. Republican Donald Trump and Democrat Hillary Clinton scored early victories on Tuesday in their bitter presidential race, with Trump winning as expected in conservative Indiana, Kentucky and West Virginia and Clinton capturing liberal Vermont.
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The dollar was down 0.4 per cent at 104.775 yen after rising to as high as 105.250 when markets earlier put a higher chance on Democrat Hillary Clinton winning the US presidential election before the vote count.
It fell to 102.550 against the yen last week when polls suggested a tightening U.S. election.
The Mexican peso was volatile, with US currency moving up 0.5 per cent at 18.37 Mexican pesos after hitting a two-month low of 18.24. The peso has since bounced back a bit.
The peso had suffered deep losses when the likelihood of a Trump victory appeared higher. Trump has pledged to renegotiate the North American Free Trade Agreement (NAFTA) with Mexico and Canada, a move that could damage the economies of the export-heavy nations.
The euro squared earlier modest losses and rose 0.1 percent to $1.1039, after reaching a four-week high of $1.1143 on Friday.
The dollar was down a fraction at 0.9776 Swiss franc, a safe-have along with the yen, from an intraday peak of 0.9825.
“We are likely to see currencies swerve up and down today on the state-by-state Electoral College count. The market seems to have priced in a Clinton win quite significantly, but a further improvement in odds of a victory could take dollar/yen to 106,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.
“But if Trump appears likely to win, dollar/yen could fall towards 100, just as it did after the Brexit vote in June when prior optimism cooled rapidly.”
The markets will keep a particularly close eye on the outcome in battleground states including Florida, Virginia, Ohio, North Carolina, Pennsylvania, Michigan, Georgia, Nevada and Arizona.
The Australian dollar, sensitive to shifts in risk appetite, nudged down 0.3 percent to $0.7741.
Sterling was up 0.1 percent at $1.2401, paring earlier losses. (Editing by Richard Pullin & Shri Navaratnam)