* Investors look past Obama re-election to focus on 'fiscal
* ECB's Draghi: euro zone to remain weak in the near term
* Greece, Spain worries dent euro sentiment
By Wanfeng Zhou
NEW YORK, Nov 7 The dollar rose to a two-month
high against major currencies on Wednesday as investors shifted
focus to U.S. fiscal woes after President Barack Obama's
re-election, bolstering the appeal of the safe-haven U.S.
The euro came under pressure after ECB President Draghi said
the bank expects the euro zone economy to remain weak "in the
near term," adding to investor nervousness ahead of the central
bank's policy meeting on Thursday.
The U.S. president faces a fresh challenge confronting the
"fiscal cliff," a mix of tax increases and spending cuts due to
extract some $600 billion from the economy starting Jan. 1
barring a deal with Congress.
"Key macroeconomic and event risks persist, including the
ability of U.S. policy-makers to effectively address the looming
U.S. 'fiscal cliff' and the unrelenting negative news flow
emanating from the euro zone's sovereign debt crisis," said
Samarjit Shankar, managing director of global FX strategy at BNY
Mellon in Boston.
"These may prove to be supportive of the greenback as
investors stay cautious."
The dollar index, which tracks the greenback versus a basket
of currencies, rose 0.3 percent to 80.812, having hit as
high as 80.924, its highest since Sept. 7.
In the past several years, the dollar has tended to benefit
from bad news about the global economy, even when the worries
stem from the United States, because investors see the U.S.
Treasury market as a safe haven.
"And while there's evidence that relation has moderated,
it's still there," said Ron Leven, senior currency strategist at
Morgan Stanley in New York.
The euro fell as low as $1.2734 on Reuters data, a
two-month low, hurt by grim economic forecasts for the euro zone
and continued sovereign debt-related worries in Greece and
Spain. It was last at $1.2761, down 0.4 percent.
Against the yen, it lost 1.1 percent to 101.87 yen.
The currency faced further pressure ahead of a Greek
parliamentary vote on austerity measures necessary to secure the
next tranche of bailout cash, without which the country faces
"If the Greek vote doesn't go through, there is a lot of
downside risk to the euro as talk of a Greece exit will
re-emerge," said Jane Foley, senior currency strategist at
Prime Minister Antonis Samaras is expected to narrowly win
but the smallest party in his coalition will oppose the
measures, leaving him with a margin of just a handful of votes.
The market also remained concerned that Spain could delay
seeking international aid.
The European Central Bank will decide on interest rates on
Thursday and while no change is expected, a slew of grim data
out of the euro zone is likely to keep alive chances of further
Earlier in the day, the clear-cut U.S. election result had
lifted stocks and riskier currencies. The higher-yielding
Australian dollar rose to its highest in nearly seven weeks
against the greenback and the Canadian dollar hit a three-week
But that trend soon fizzled out as investors turned their
attention to the euro zone's problems and the U.S. fiscal cliff.
Some analysts said strength in the dollar could be limited
as Obama's win means the Federal Reserve's monetary policy is
likely to remain accommodative.
Against the yen, the dollar fell to as low as 79.79 yen
on Reuters data, well below its six-month high of 80.67
hit last week. It was last down 0.6 percent at 79.86 as yields
on U.S. Treasuries fell sharply.
Analysts at Morgan Stanley said they are maintaining their
bullish strategy for dollar/yen and expected a re-test of the
80.70 high, with a break above there opening the way for gains
towards their 84.00 target.