THE dollar closed 4 per cent firmer today as Senator Barack Obama's victory in the US presidential race gave a boost to regional share markets.
Risk appetite improved as financial markets took the view that a Democrat in the White House would do a better job of fixing the economic crisis.
At 5pm (AEDT), the Australian dollar was trading at $US0.6915/19, up 2.64 US cents from yesterday's close of $US0.6651/55.
During the day, the local currency traded between an afternoon low of $US0.6832 and a late morning high of $US0.7007.
The dollar was on a firm footing today following a 4 per cent surge on Wall Street overnight ahead of the
US presidential vote.
Regional shares surged on reports Senator Obama was likely to beat his Republican opponent John McCain in the US electoral college count that decides the presidency.
The Hong Kong market jumped 5.7 per cent in early trade, Japan's Nikkei stock index was up 2.5 per cent in the afternoon, while the Australian share market closed 3 per cent higher.
Easy Forex senior dealer Francisco Solar said risk appetite improved, as Senator Obama's election victory appeared more likely.
"There's a sense here in the markets that Obama's win is quite positive for the economy," he said.
"A Democrat is seen as a better steward to fix the financial crisis than another four years of Republican policy."
The Australian dollar fell to its daily low in mid afternoon trade, to sink below $US0.6900, as
Senator McCain's concession speech sparked a flurry of US dollar buying.
"There was a sense this was a positive US dollar story ... it was quite a significant move," Mr Solar said.
"As soon as word come out (about
Senator Obama's election win) the Aussie and the Kiwi fell significantly."
The US dollar rise was shortlived by the close of the local session, as traders in London helped the Australian dollar climb back above the $US0.6900 in the final minutes of the domestic session.
The Australian dollar is tipped to face selling pressure tomorrow, with economists expecting Australian Bureau of Statistics labour force data to show the jobless rate jumping by 0.1 per cent to 4.4 per cent in October.
