The dollar rose to its highest against the euro since November 1 after Democrat candidate Al Gore conceded victory to Republican candidate George W. Bush. The US currency retreated after Gore withdrew his election concession, as the vote in the crucial state of Florida became too close to call. "Nobody knows who has won this election - this could roll on for the next couple of days," said Mr Tony Norfield, global head of treasury research at ABN AMRO in London.

Mr Norfield said a Bush victory would be positive for the dollar, while a Gore victory was unlikely to be better than neutral for the euro. The euro fell rapidly below $0.8540 when a Bush victory appeared certain, but recovered after the outcome became unclear. It was trading just above key support at $0.8550. A recount in the crucial state of Florida, which will determine the outcome of the election, could be completed as early as 2200 GMT, according to Florida Attorney general Bob Butterworth.

A victory for Mr Bush is seen aiding the dollar as he is seen less likely than Mr Gore to support further international intervention in defence of the euro, following a euro-buying spree by Group of Seven industrial nations in September. Bush's economic policies are also seen as more beneficial to US stock markets, with a knock-on positive effect expected for the currency.

"We had a taste early today of what a Bush win would mean for the euro," said Mr Neil MacKinnon, senior currency strategist at Merrill Lynch in London. But any inclination to sell euros was being kept in check for the time being by wariness that the European Central Bank could mount the sort of solo intervention in the euro's support already seen on Friday and Monday.