By Yumna Mohamed
LONDON (Reuters) - The dollar lost more ground in early European trading on Thursday, sinking another half a percent against the yen and other currencies after more reports on FBI probes into presidential candidate Hillary Clinton.
With investors increasingly worried by the prospect of a Donald Trump presidency that they fear would carry global risks to trade and growth, the yen has gained more than 3 percent against the dollar in just over a week.
Investors were unsettled by media reports that some agents at the FBI had wanted to press ahead with an investigation of the Clinton Foundation, the latest twist in a long-running inquiry into candidate Clinton's use of a private email server while she was secretary of state.
That overshadowed any impact from the U.S. Federal Reserve's November meeting and statement late on Wednesday and sent the dollar to a 1-month low against the yen, and to more than $1.11 per euro for the first time since Oct. 10.
"It’s difficult for any policy maker to make a massive commitment given the big question mark between now and next week, but it was enough to keep the Fed hawkish on a December hike," said ING strategist Viraj Patel of the Fed's decision to hold rates.
"It was probably the most rational outcome and you can see that markets understood this because prices weren’t too affected by the meeting yesterday."
President Barack Obama spoke out for the first time on Wednesday in defense of Clinton, warning the FBI that there was "no room for innuendo" in the investigative process.
The dollar was last down 0.4 percent to 102.86 yen <JPY=> at 0426 ET
An average of polls compiled by RealClearPolitics website showed Clinton just 1.7 percent ahead of Trump nationally on Wednesday, with 47 percent support to his 45.3 percent.
But a Reuters/Ipsos daily tracking poll released on the same day showed Clinton ahead by 6 percentage points among likely voters.
Traders were pricing in a 78 percent likelihood that the Fed will raise interest rates in December, according to the CME Group's FedWatch Tool. But a Trump win is widely thought to have the potential to delay that move.
"While a December rate rise still seems the most likely outcome and the probability of a move in December has gone up to 78% overnight, we can’t rule out the prospect of a delay if the U.S. economy undergoes a Trumpectomy in just under a weeks’ time," CMC Markets strategist Michael Hewson said in a note.
A robust U.S. nonfarm payrolls report on Friday is also seen as a crucial ingredient to any Fed move. Employers are expected to have added 175,000 jobs in October, according to the median estimate of 106 economists polled by Reuters. [ECONUS]
(The story was refiled to fix a typo in the lead)