Dollar Falls After Obama Wins, Fiscal Cliff LloomsSubmitted by father_abraham85 on Wed, 11/07/2012 - 03:52
By Hideyuki Sano
TOKYO | Wed Nov 7, 2012 1:56am EST
(Reuters.com) - The dollar fell broadly in Asia on Wednesday in reaction to U.S. President Barack Obama's election victory, as his re-election was seen ensuring that the Federal Reserve's quantitative easing will be in place.
The Democrats look set to retain a majority in the Senate while the Republicans also appear to be solidifying their control of the House of Representatives, keeping intact the risk of policy paralysis over the looming "fiscal cliff" -- a sharp fiscal tightening due to start next year.
"The Fed's quantitative easing is essentially a policy to cheapen the dollar," said Yunosuke Ikeda, senior forex strategist at Nomura Securities. "Republicans have been criticizing the policy, but it seems like that policy is likely to stay."