* FBI will not pursue charges vs Hillary Clinton for email
* Improved Clinton chances boosts dollar vs major currencies
* Mexican peso has best day since September (Updates to U.S. afternoon trading, adds quote)
By Dion Rabouin
NEW YORK, Nov 7 (Reuters) - The dollar rose on Monday after the FBI decided that U.S. Democratic presidential nominee Hillary Clinton will not face criminal charges, which was seen as a boost to her chances of winning Tuesday's contest with Republican rival Donald Trump.
The greenback gained 0.75 percent against a basket of currencies .DXY after getting hammered last week when FBI Director James Comey said the agency was looking at another large batch of Clinton emails, strengthening chances of a Trump victory, an outcome that was seen as likely to send shock waves through financial markets.
The Federal Bureau of Investigation said late Sunday it stood by its earlier finding that no criminal charges were warranted against Clinton for her email practices. The announcement sent the dollar surging against the yen JPY= , euro EUR= and pound, and gave a jolt to the Mexican peso MXN= . all the election. It's all the Comey letter," said Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, New Jersey, referring to the currency moves.
"Markets want continuity and essentially they want what they have priced in and both point towards Clinton. That's why markets are reacting to anything that boosts Clinton's chances by taking back some of the selloff from the past week or so."
Despite wide-ranging political worries from a Trump victory to the possibility of a Democratic sweep of the U.S. presidency, Senate and House of Representatives, markets now look confident the U.S. will continue with the status quo, analysts said.
"It's going to be a tight race, but the market appears to be pricing in a Clinton victory," with the Republicans likely to control the House and the Democrats likely in control of the Senate, said Peter Ng, senior FX trader at Silicon Valley Bank in Santa Clara, California.
Trump's stance on immigration, foreign policy and trade have made the Mexican peso a proxy for his election chances.
Boosted by the FBI's decision, the peso rose as much as 2.5 percent on Monday, on pace for its largest one-day percentage gain since Sept. 27, to hit a 12-day high of 18.55 per dollar.
The dollar rose 1.4 percent to 104.58 yen JPY= . It declined to 102.550 against the safe-haven Japanese currency last week as polls showed the U.S. presidential race tightening.
The euro EUR= fell 0.9 percent against the dollar to $1.1035. Sterling GBP= also slipped against the dollar, falling 1 percent to $1.2390.