Dollar rises after Donald Trump clinches victory; Mexican peso plummets

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The U.S. dollar traded higher on Wednesday as investors digested Donald Trump's stunning victory over Hillary Clinton.

The , which measures the greenback against a basket of currencies, erased earlier losses, trading at 98.43 as of 3:35 p.m. ET. The euro fell around 0.87 percent versus the dollar, holding around $1.092.

"As I turn on the trading screens this morning the markets have seemed to calm a bit," said Chris Gaffney, president of EverBank World Markets. "Something similar occurred following the Brexit vote with large overnight spikes in some of the safe haven assets but then once investors started to digest what had occurred the markets reversed course and calmed down."

Clinton called Trump to concede the presidential election early Wednesday after a stunning turn of events in Tuesday's contest.

ThinkMarkets' senior market analyst Matt Simpson warned in a note that with markets having priced in a Clinton victory previously, it left the potential for "some nasty whipsaws over the next eight to 12 hours" in the event of unexpected outcomes in individual states.

"Whilst markets seem optimistic going into this, we cannot help but feel some of these moves are a little too pre-emptive," he said. "Expectations can (and usually do) lead to disappointment."

The yen fell below a previous session low of 105.46, last trading at 105.81 against the dollar as investors unwound earlier safe-haven trades.

Yen crosses traded mixed, with the euro/yen pair at 115.57, down from an earlier high of 116.02, while pound/yen erased earlier losses at 131.25.

The climbed to a session high of 0.9542 against the dollar from an earlier low of 0.9835. But the safe-haven currency fell against the greenback around 3:35 p.m. ET, trading at 0.9839.

The tumbled as the likelihood of a Trump victory increased throughout the night. The peso had been closely watched during the election campaign as a barometer of the markets' expectation of a Trump win. The peso weakened to a session low of 20.77, falling from an earlier high of 18.14. At 3:38 p.m. ET, the peso traded at 19.78 versus the dollar.

The Canadian dollar traded at 1.3371 versus the greenback as of 3:38 p.m. ET.

Both currencies have been on investors' radar since Trump said in October he would renegotiate the trilateral North American Free Trade Agreement (NAFTA) between the U.S., Canada and Mexico — an event that could have a negative impact on the economies of the latter two.

"The Trump victory would be detrimental to both economies," Stephen Innes, a senior trader at OANDA told CNBC by email, explaining that a President Trump would be more detrimental to Mexico and the peso because it could "increase the odds of driving the (Mexican) economy into recession, given his protectionist rhetoric and likely tariff hike."

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