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There must be something special about the dollar. Normally a political impasse is a recipe for a selloff in a currency.

The unique position now holding in the U.S. could have been expected to lead to a significant decline in the dollar. This hasn't happened and the dollar is actually a little firmer across the board. For the rest of today, at least, the market will be totally focused on the details of the U.S. election and the market may well stay on the sidelines until matters become clearer.

The euro opened at $0.8560, down from last night's close of $0.8590. The euro initially rallied on expectations that Al Gore had won the election, seeing highs of $0.8690. However, these gains evaporated when it became clear that the final outcome was still in doubt. Gore is seen as likely to support efforts to strengthen the euro while Texas Gov. George W. Bush is expected to strongly back a strong dollar policy and to resist pressures to join in future joint intervention agreements -- like the one which boosted the euro in September.

"In the short term -- once all the uncertainty regarding the U.S. election is out of the way -- the focus will be on further intervention," said Philip Shaw of

Investec Bank

. "In the near term, we'll have nervous trading," he added.

Elsewhere, the dollar is generally strong, but trading has been thin and moves driven by ongoing news announcements.

The yen has slipped nearly 1% to open at 107.60, as traders lose enthusiasm for holding long yen positions. The euro is lower against the yen, at 92.15.

Sterling is lower, at $1.4250, having dropped as much as 1% ahead of today's pre-budget assessment in

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by Chancellor of the Exchequer Gordon Brown. The statement is expected to be fairly bullish and is likely to focus on sensitive fuel tax and pensions issues. "Because of the fuel crisis we expect fuel concessions to specifically targeted groups," said Shaw. "The other main measure would be pensions -- with above inflation increases," he added.

In general, the pound may not be affected too much by the statement, unless the concessions are seen as excessive.

The Swiss franc is lower against the dollar, at SF1.7750. The euro has again eased vs. the Swiss franc, at SF1.5195.

The Canadian dollar has dropped further in early trading, to open at C$1.5360, after losing ground late yesterday. "Flows will stay reasonably quiet until Thursday," said Jack Spitz of

National Bank of Canada


The Australian dollar has bounced around in a 1.5% range as the U.S. dollar has moved in choppy trading. Currently, the Aussie is opening little changed, at $0.5285.

The New Zealand dollar is weaker, at $0.3975.

Not surprisingly, smaller currencies are also being buffeted by the uncertainty over the U.S. election and the dollar. The South African rand has slipped to 7.66/dollar from 7.60. The Polish zloty, on the other hand, is solidly firmer vs. the euro and slightly firmer in dollar terms -- at 4.56/dollar.