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By Lucy Bayly
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 8, 2016. REUTERS/Brendan McDermidREUTERS

Wall Street made gains by the closing bell on Election Day, as markets showed greater confidence that Democrat Hillary Clinton could win the presidential race.

Stocks rose across the board and Wall Street’s infamous “fear gauge,” the volatility index, dipped by around 5 percent. The Dow Jones Industrial Average closed about 73 points up, having hit a 50-day high earlier in the day.

Markets are not expecting to see a substantial rally in the case of a Clinton win, having essentially priced in her victory after FBI Director James Comey cleared the Democratic nominee of any criminal charges on Sunday.

"The events of the last two weeks provide investors with an excellent preview of how the market might respond to the outcome of today's election," said Jonathan Golub of RBC Capital Markets.

But a win for Donald Trump could see stocks plummet by 10 percent, and may see the peso tank by as much as 25 percent, agreed forex traders. The Republican nominee remains an unknown quantity in terms of his policies on foreign trade and immigration.

Nonetheless, the larger banks are taking no chances. Barclays and Citi both issued warnings Tuesday afternoon about upcoming volatility in foreign currency markets, partly in view of the massive pendulum swings that came after Britain’s shock vote to leave the European Union in June.

The dollar could fall as much as 5 percent against the yen if Trump were to win, versus a bounce of around 1-2 percent on Clinton, said Reuters.