U.S. voters handing President Barack Obama four more years to steer the globe's largest economic system tugged down the value of the world's reserve currency on Wednesday as the victory all but assures the resumption of monetary easing policies to spur the economy, Bloomberg reports.
As the challenge mounted by former Massachusetts Governor Mitt Romney fell short, the U.S. dollar slipped against 12 of its 16 counterpart currencies the day after Election Day. Quantitative easing programs implemented by the U.S. Federal Reserve typically pull down the value of the U.S. dollar, and Romney stood opposed to those methods.
"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," senior foreign-exchange strategist Paul Robson with Royal Bank of Scotland Group Plc in London told Bloomberg on Wednesday.
President Obama carried battleground states Colorado, Ohio and Virginia, all of which helped him amass the 270 Electoral College votes to win re-election. Results from Florida, another key battleground state, were unclear but unimportant.
Slippage to the dollar in the aftermath of the election is unlikely to persist very long, Reuters reports, noting the vital role fulfilled by the world's reserve currency.
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