FOREX-Dollar extends multi-year highs after U.S. elections

(New throughout, updates prices and market activity to New York trading; new byline, changes dateline, previous LONDON)

* US election results lifts dollar, euro wariness ahead of ECB

* Greenback at fresh 7 year highs against yen

* Dollar index holds near 4-1/2 year high

By Daniel Bases

NEW YORK, Nov 5 (Reuters) - The dollar rose on Wednesday, extending multi-year highs after Republicans in mid-term elections won control over both chambers of the U.S. Congress for the first time since 2006, lifting investor expectations for more pro-business policies.

Chances for less political gridlock boosted the greenback with hopes that this might spur an economic recovery in which the U.S. unemployment rate has fallen to 5.9 percent.

The dollar extended its months-long run to hit a seven-year high against the Japanese yen. The euro slid to a 26-month low against the greenback and the Australian dollar collapsed nearly 2 percent.

In mid-morning New York trade, the dollar index hit a 4-1/2 year peak of 87.606 against a basket of currencies.

"The decisive Republican win might help reduce political gridlock on Capitol Hill and that is a positive for the dollar because it can tamp down on political uncertainty," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, D.C.

"With the GOP in control on Capitol hill that could be viewed as more constructive for the economy and viewed as more pro-business," he said.

Republicans seized control of the U.S. Senate in a blow to President Barack Obama that will curb his legislative agenda in his last two years in office.

U.S. private employers added more jobs than expected in October, payrolls processor ADP reported. Friday's October U.S. jobs report is expected to show an unchanged unemployment rate of 5.90 percent. On the negative side, the pace of growth in the U.S. services sector slowed more than expected.

However, the expectation that U.S. monetary policy will tighten and the U.S. economy is on a general upward trajectory is keeping the dollar's gains intact.

The dollar climbed to a high of 114.84 yen before slipping back to 114.51 yen for a gain of 0.85 percent. The yen hit a 30-year low against the Swiss franc of 119.16.

Bank of Japan Governor Haruhiko Kuroda said the central bank is ready to do more to hit its 2 percent price goal and boost the economy. He stressed the BOJ will do whatever it takes to hit the target in two years and vanquish nearly two decades of grinding deflation.

The euro slid to a fresh low of $1.2458, before stabilizing around $1.2483, down 0.50 percent on the day.

The euro's struggles continued a day ahead of a European Central Bank meeting on Thursday. Investor (Other OTC: IVSBF - news) expect the central bank to hold off on fresh policy action despite more evidence of a struggling economy.

The euro fell to a two-year low of 1.2033 francs, not far from the Swiss central bank's floor of 1.20 francs imposed in September 2011.

The Australian dollar slumped nearly 2 percent to US$0.8566, its worst one day performance since June 2013. The Aussie dollar has suffered losses given its close ties to the Chinese economy which is showing signs of weakness along with the plunge in commodities prices, a major factor that helps determine its value. (Additional reporting by Anirban Nag in London; Editing by David Gregorio)