* Asian shares hit 7-week low, Nikkei down 1.8 pct
* Markets see Trump victory would lead to uncertainty
* Swiss franc gains, Mexican peso slips
* Markets price in about 70 pct chance of Dec rate hike
* European shares seen falling 0.5-0.8 pct
By Hideyuki Sano
TOKYO, Nov 2 (Reuters) - Asian shares tumbled to seven-week lows and the dollar lost ground against the yen and the euro on Wednesday as investors were rattled by signs the U.S. presidential election race was tightening just days out to the Nov. 8 vote.
Markets were beginning to rethink their long-held bets of a victory for Democratic candidate Hillary Clinton amid signs her Republican rival Donald Trump could be closing the gap, forcing money out of riskier assets and into safe-havens such as the Swiss franc and gold.
Spread-betters see the risk-off mood denting major European share indexes, with Britain’s FTSE, Germany’s DAX and France’s CAC tipped to fall 0.5 to 0.8 percent.
Heavy selling also knocked the Mexican peso, seen as the most vulnerable to a Trump presidency due to his pledge to build a wall along the U.S. border with its neighbour to prevent entry of illegal immigrants, and other proposals including slapping tariffs on Mexican imports.
The peso, which posted its biggest fall in two months on Tuesday, extended losses to 19.380 to the dollar, its lowest level since early October.
Investor anxiety has deepened in recent sessions over a possible Trump victory given uncertainty on the Republican candidate’s stance on key issues including foreign policy, trade relations and immigrants, while Clinton is viewed as a candidate of the status quo.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.3 percent to seven-week lows while Japan’s Nikkei fell 1.8 percent. U.S. stock futures shed 0.4 percent in Asia, edging near four-month low touched on Tuesday.
“It’s becoming all about the U.S. elections. Markets are trying to factor in the changing atmosphere,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
The tumultuous presidential race appeared to tighten after news that the Federal Bureau of Investigation was reviewing more emails as part of a probe into Clinton’s use of a private email server.
While Clinton held a five-percentage-point lead over Trump, according to a Reuters/Ipsos opinion poll released on Monday, some other polls showed her Republican rival ahead by 1-2 percentage points.
That pushed U.S. S&P 500 Index down to a four-month closing low on Tuesday. The CBOE volatility index, often seen as investors’ fear gauge, briefly rose to a two-month high above 20 percent.
In the currency market, traders sold the dollar partly as they suspect Trump would prefer a weaker dollar given his protectionist stance on international trade.
The euro rose to a three-week high of $1.1069 in U.S. trade on Tuesday, up about two percent from its 7-1/2-month low of $1.0851 hit just over a week ago. It last stood at $1.1065.
Against the yen, the dollar slipped to 103.69 yen from three-month high of 105.54 yen set on Friday.
“If you had a long dollar position on the view that the dollar would gain because Clinton would win, you would surely close that position because her victory is less certain,” said Koichi Yoshikawa, executive director of financial markets at Standard Chartered Bank.
“And people were buying back the euro because that is the currency that had been being shorted the most against the dollar,” he added.
Other safe-haven assets were also favoured, with the Swiss franc rising to 1.0782 franc per euro, its highest level since late June. Gold hit a four-week high of $1,291.6 per ounce on Tuesday and last stood at $1,288.5.
The tense back drop in markets came as the Federal Reserve holds its two-day policy meeting, with its statement due later on Wednesday.
While traders do not expect the central bank to raise interest rates just a week ahead of the presidential election, they are looking for signs that the Fed is set to hike rates in December.
U.S. interest rate futures are pricing in about 70 percent chance of a rate hike in December but virtually no likelihood of a hike on Wednesday.
Oil prices tumbled to one-month lows as a trade group’s report of larger-than-expected U.S. crude inventory added to concerns about oversupply from growing doubts over whether oil producing countries can agree on an output cut later this month.
Brent crude futures fell to $47.82 per barrel, having hit a low of $47.72 on Tuesday.
Still, even as investors were moving out of riskier assets, copper bucked the trend, rising to a three-month high of $4,922 a tonne on Tuesday before easing to $4,885 in Asia.
So did iron ore futures in China, which hit two-year highs on hopes the Chinese economy may be mending. (Editing by Shri Navaratnam)