* FBI clears Clinton after review of newly uncovered emails
* Dollar gains 1.2 pct vs yen, 0.7 pct vs euro
* Mexican peso hits 12-day high vs dollar (Adds fresh quote, updates prices)
By Patrick Graham and Yumna Mohamed
LONDON, Nov 7 (Reuters) - The dollar rose more than half a percent on Monday after U.S. presidential contender Hillary Clinton got an eleventh-hour boost ahead of Tuesday's election from news she would not face criminal charges related to her use of a private e-mail server.
The greenback rebounded 0.6 percent against a basket of currencies DXY= after getting hammered last week when the FBI said it was looking at another large batch of emails, strengthening the chances of a victory for businessman Donald Trump - an outcome likely to send shockwaves through markets.
The Bureau said late on Sunday that it stood by its earlier finding that no criminal charges were warranted against Clinton, sending the dollar surging against the yen JPY= and the euro EUR= , and offering relief to the Mexican peso MXN= . said investors were now more confident of a victory for Clinton - who is seen as the status quo candidate - that would clear the way for a rise in U.S. interest rates next month. Prediction markets are giving Trump around a 1 in 5 chance of victory, down from 1 in 3 at one point last week.
"Much of the Trump discount in the dollar has already come out," said Stephen Gallo, head of European FX strategy with Bank of Montreal in London.
Regardless of the outcome of Congressional elections, he said a Clinton victory should take the dollar swiftly to $1.09 per euro. He also argued that a contested election would be the worst outcome for the greenback, sending the euro to $1.14.
But some analysts are treating the U.S. elections outcome with caution after the British vote to leave the European Union in June took markets by surprise and sent them into disarray.
"Brexit was a hard lesson for many and it's still in the recent memory," Oanda senior market analyst Craig Erlam said.
Erlam added that the dollar's recovery might be muted by speculation that Clinton is not out of the woods yet.
"It's hard to know what damage the reopening of the investigation did to Clinton's chances," he said.
Owing to Trump's stance on immigration, foreign policy and trade, the Mexican peso has taken a heavy hit, down at one point in September by as much as 17 percent against the dollar since the billionaire businessman won the Republican nomination.
Boosted by the FBI's clearing of Clinton, the peso gained as much as 2.5 percent to hit a 12-day high of 18.55 per dollar.
The dollar was up 1.2 percent at 104.33 yen JPY= . It had declined to 102.550 against the safe-haven Japanese currency last week as polls showed a tightening U.S. presidential race. (Editing by Gareth Jones)