* Dollar falls vs yen as weak data dulls risk appetite
* Safe-haven bid and Obama victory boost dollar vs euro
* Obama's election removes some uncertainty for market
* Weak euro-zone, UK data presage big ECB, BoE rate cuts
(Recasts, adds comment, updates prices, changes byline)
By Steven C. Johnson
NEW YORK, Nov 5 (Reuters) - The dollar fell against the yen
on Wednesday as weak economic data added to fears about the
economy but gained on the euro after Democrat Barack Obama's
decisive victory in the U.S. presidential election.
Obama's historic and convincing win helped erase one source
of uncertainty for financial markets, analysts said, and that
helped boost the dollar against most major currencies.
On his first day as president-elect, Obama was greeted by
reports showing employers cut 157,000 private sector jobs last
month while the services sector contracted sharply. For more
see [].
"The U.S. election sends the message that there's finally
some political certainty, and that's one more risk off the
table for markets," said Mark Frey, head of FX trading at
Custom House in Victoria, British Columbia.
"But the overall economic picture darkened today, and the
overall sentiment on the economy is still quite negative."
Unease about the economy cut demand for riskier assets,
including those in euros, sterling and high-yield currencies,
and prompted investors to repatriate funds into dollars. U.S.
stocks fell, with the Dow industrials <> closing down more
than 5 percent.
But that anxiety also lifted the yen <JPY=>, which rose
some 1.2 percent to 98.33 per dollar as investors bought back
the low-yielding currency to repay yen-denominated loans.
The euro fell 0.9 percent to $1.2912 <EUR=> while sterling
dropped 0.7 percent to $1.5904 <GBP=> and the Australian dollar
shed 2.2 percent to $0.6850 <AUD=>.
A slump in euro zone manufacturing to a fresh decade low
also weighed on the zone's common currency and overall risk
appetite, boosting expectations of at least a half a percentage
point interest rate cut from the European Central Bank on
Thursday.
The Bank of England is also expected to cut rates by at
least half a point, though markets are increasingly pricing in
the chance of a bigger cut to stimulate the British economy.
The ECB and BoE last month each delivered half-point cuts
to 3.75 percent and 4.5 percent, respectively, in a coordinated
move with other central banks, including the Federal Reserve.
Analysts pointed out, though, that hefty rate cuts would
not necessarily hurt the currencies but could instead spark a
rally as central banks prove they are taking recession risks
seriously.
The same happened earlier this week when the Australian
dollar rallied after the Reserve Bank of Australia surprised
markets with a bigger-than-expected rate cut.
"The market is likely to reward the ECB and BoE, as it did
the RBA, if the central banks take aggressive steps to address
the deterioration in their economies," said Brown Brothers
Harriman in a research note to clients.
ING analysts pointed out that ECB board member Axel Weber
-- often considered a policy hawk -- has "given his blessings"
for big rate cuts.
European Central Bank executive board member Juergen Stark
told the Financial Times Deutschland that weak euro zone growth
and oil price fluctuations could push inflation briefly into
negative territory. [].
(Additional reporting by Nick Olivari in New York and Naomi
Tajitsu in London; Editing by James Dalgleish)
