Dollar highest in 9 months as risk-on mood remains firmly intact

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TOKYO (Reuters) - The dollar rose to a nine-month high against a basket of major peers early on Monday, as a risk-on mood in global markets triggered by Donald Trump's election to president remained firmly intact.

The dollar index <.DXY> was up 0.4 percent at 99.428 after touching 99.445, its highest since Feb. 1.

The greenback has strengthened as expectations that Trump's administration would boost spending, lift inflation and elevate Treasury yields took hold. The 10-year Treasury note yield <US10YT=RR> rose to a 10-month high of 2.18 percent in Asia.

Such hopes have also lifted the cloud of risk aversion in equity markets such as the United States and Japan, giving the dollar a big leg-up against the safe-haven yen. The Dow <.DJI> closed at a record high on Friday, while the Nikkei <.N225> rose 1.4 percent in early trade Monday.

The dollar was up 0.6 percent at 107.360 yen <JPY=>, having risen above the 107 threshold for the first time since late July.

Images of the New York Stock Exchange before the 2016 election:

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New York Stock Exchange before the election
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New York Stock Exchange before the election
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2016. REUTERS/Brendan McDermid
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2016. REUTERS/Brendan McDermid
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2016. REUTERS/Brendan McDermid
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2016. REUTERS/Brendan McDermid
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 3, 2016. REUTERS/Brendan McDermid
Pedestrians walk along Wall Street near the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Oct. 31, 2016. U.S. stocks rose from a six-week low amid an increase in deal activity as traders assessed the outlook for the presidential election and interest rates in the world's largest economy. Photographer: Michael Nagle/Bloomberg via Getty Images
NEW YORK, NY - NOVEMBER 01: Traders work on the floor of the New York Stock Exchange (NYSE) on November 1, 2016 in New York City. As Wall Street continues to feel election uncertainty, the Dow Jones closes fell more than 100 points. (Photo by Spencer Platt/Getty Images)
Trader Tommy Kalikas works on the floor of the New York Stock Exchange, Wednesday, Nov. 2, 2016. Stocks are opening modestly lower on Wall Street as the market extends a pre-election losing streak. (AP Photo/Richard Drew)
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Nov. 4, 2016. U.S. stocks fluctuated amid payrolls data that bolstered speculation the economy is strong enough to weather higher interest rates, while investors remained wary before the looming presidential election. Photographer: Michael Nagle/Bloomberg via Getty Images
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Nov. 4, 2016. U.S. stocks fluctuated amid payrolls data that bolstered speculation the economy is strong enough to weather higher interest rates, while investors remained wary before the looming presidential election. Photographer: Michael Nagle/Bloomberg via Getty Images
NEW YORK, NY - NOVEMBER 01: Traders work on the floor of the New York Stock Exchange (NYSE) on November 1, 2016 in New York City. As Wall Street continues to feel election uncertainty, the Dow Jones closes fell more than 100 points. (Photo by Spencer Platt/Getty Images)
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Oct. 31, 2016. U.S. stocks rose from a six-week low amid an increase in deal activity as traders assessed the outlook for the presidential election and interest rates in the world's largest economy. Photographer: Michael Nagle/Bloomberg via Getty Images
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"It is probably a good idea to keep riding the dollar higher while the Trump camp has not yet revealed any specific policy steps," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

"The euro could be more easily exposed to negative pressure amid concerns that the win by Trump, with his anti-globalism agenda, could affect referendums and elections in Italy, Holland and France next year."

The euro was down 0.5 percent at $1.0800 <EUR=> after touching $1.0798, its lowest since late January.

The Australian dollar was little changed at $0.7552 <AUD=D4> and the New Zealand dollar was down 0.25 percent at $0.7107 <NZD=D4>.

The Aussie had dropped about 1.6 percent and the kiwi shed more than 3 percent last week against a broadly stronger dollar.

Currencies associated with the Trans Pacific Partnership, (TPP) such as the Aussie and kiwi, came under additional pressure after news on Friday that Trump's election had effectively rendered the trade deal with Asian and Latin American nations a non-starter for the U.S. Congress.

Trump had made his opposition to the TPP a centerpiece of his election campaign.

The pound was down 0.2 percent at $1.2567 <GBP=D4>. It was still in reach of a five-week high of $1.2673 reached last week.

Sterling has benefited as market focus turned away from Brexit toward potential political risks in Europe, with expectations that Trump's win could strengthen Britain's ties with the United States.

(Reporting by Shinichi Saoshiro; Editing by Eric Meijer)

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Markets

S&P 500 2,191.95 0.87 0.04%
DJIA 19,170.42 -21.51 -0.11%
NASDAQ 5,255.65 4.55 0.09%
DAX 10,513.35 -20.70 -0.20%
HANG SENG 22,564.82 -313.41 -1.37%
NIKKEI 225 18,426.08 -87.04 -0.47%
USD (per EUR) 1.07 0.00 0.06%
USD (per CHF) 1.01 0.00 -0.01%
JPY (per USD) 113.48 -0.41 -0.36%
GBP (per USD) 1.27 0.01 1.16%

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