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Currencies: Dollar Weakens as Election Saga Refuses to End

Currency markets are relatively quiet this morning, with the dollar moving very little versus other major currencies. Trading has remained muted as the election saga drags on in the U.S. In the meantime, Canadians took only one day yesterday to vote overwhelmingly in favor of Prime Minister

Jean Chretien

. This has given Canada's currency a boost.

A speech by Vice President

Al Gore

last night proclaiming his intentions to count every ballot, indicating that the election process may continue for several more weeks, was set in stark relief by the political certainty of our neighbor to the north. The difference between the two pictures was mirrored in forex markets, where the Canadian dollar continued to rally today, reaching three-week highs versus the U.S. dollar. In recent trading, though, the Canadian dollar was off its early-morning highs; it was most recently at C$1.5314, down from yesterday's close of C$1.5350.

Elsewhere in the global market, recent trends are continuing. The dollar remains strong but is weakening, the yen is slipping, and the euro is weak, despite insistence from

Bank of France

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governor Jean-Claude Trichet that the euro is worth trusting. Trusting the euro was the basis of talks with the Japanese Ministry of Finance yesterday, but there was reportedly no mention of intervention.

The euro is moving up slightly against the dollar. In fact, it touched a one-and-a-half-week high today amid continuing speculation that the

European Central Bank

might intervene in the market and expectations that the U.S.'s third-quarter GDP figures will be revised downward Friday.

"You do have broad-based weakening of the dollar," said Marc Chandler, chief currency strategist at

Mellon Bank

, which has been reflected by the rise of the euro and the Australian dollar against the U.S. dollar. He also spoke of broad-based euro buying this morning, initiated in part by both European and U.S.-based funds. The euro was recently trading at $0.8563, up from its close at $0.8512 yesterday.

Despite the ailing Japanese stock market and talk of possible government intervention, the Japanese yen strengthened slightly against the dollar. The dollar/yen cross was lately at 110.57, down from yesterday's close of 110.69. Euro/yen traded at 94.53, up from yesterday's close of 94.22.

The Australian dollar is trading this morning at $0.5247, down from yesterday's close of $0.5260. The British pound is trading at $1.4215, up from yesterday's close of $1.4161.