The relief rally seen in global stock markets after the US elections passed off without a hitch lost momentum today, as European shares fell and Wall Street prepared for an expected flat opening.
Hopes for a post-election recovery in the dollar were also dashed as the US currency hit a nine-year trough against a basket of currencies.
It also flirted with its weakest-ever level against the euro, despite an assertion from ECB President Mr Jean-Claude Trichet that US policy still favoured a strong dollar and that disorderly moves remained undesirable.
"Now that President Bush has emerged the winner, his new administration will face the proverbial cold shower - a wake-up call that cuts through campaign rhetoric and focuses on the heavy lifting that now lies ahead," said Mr Stephen Roach, chief economist at Morgan Stanley and a notable bear.
"America will wake up after the election with the most daunting economic agenda it has faced in a generation," he said in a note to clients, citing unprecedented levels of household debt, a dollar-negative record US current account deficit, and a massive budget deficit.
Speculation that a second Bush administration would tolerate a weaker dollar to help narrow the country's onerous trade deficit sent the dollar sprawling to around $1.2885 versus the euro and to less than 106 yen.
With the world's biggest economy struggling to grow fast enough to make clear inroads into unemployment, attention also turned to tomorrow's key US jobs report.
US crude futures were back above $50 a barrel, giving traders further reason to worry about the potential oil drag on economic growth. The oil effect, together with the euro's export-sapping gains, is seen ruling out almost any chance of an interest rate rise this year in the misfiring euro zone economy.