FOREX-Dollar bounces back, yuan slips after China appears to keep a tab on its currency

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano
TOKYO, Oct 13 (Reuters) - The dollar bounced back from a
three-week low on Tuesday as market players bought it back,
particularly against riskier peers, after Chinese authorities
appeared to be trying to put a brake on recent rises in the
yuan.
The Australian dollar lost about a half percent, taking an
additional hit from media reports China has halted coal imports
from the country as their relations deteriorate.
But overall risk sentiment was propped up by hope that
former U.S. Vice President Joe Biden will beat President Donald
Trump in the Nov. 3 U.S. election and push forward with a large
stimulus to shore up a pandemic-hit economy.
The dollar index rose 0.1% to 93.190 =USD , trying to
extend its rebound from Friday's near-three-week low of 92.997,
with the euro falling 0.17% to $1.1794 EUR= .
The Chinese yuan fell 0.1% to 6.7500 per dollar CNH= ,
after the central bank set a weaker than forecast midpoint,
offseting any boost from strong Chinese trade data. China's central bank announced on the weekend the removal of
reserve requirements for some foreign exchange forwards,
cementing speculation Beijing wants to curb the yuan's strength.
"Biden trades have been hot in the last several days, in
which people sell the dollar, particularly against currencies
that have suffered under Trump, like the yuan, the Mexican peso
or the Canadian dollar," said Masaru Ishibashi, joint general
manager of Sumitomo Mitsui Bank.
"But if you think that Beijing is sending a message to rein
in the yuan's strength, then it might make sense to unwind that
trade for now."
The Mexican peso also fell 0.4% to 21.270 to the dollar
MXN=D4 while the Canadian dollar dipped 0.1% to C$1.3124 per
dollar CAD=D4 .
A Biden victory is seen as negative for the dollar also
partly because his pledge to increase corporate tax would reduce
returns from investments in the United States, putting pressure
on the dollar even against safe-have currencies such as the yen
and the Swiss franc.
The yen moved little at 105.43 per dollar JPY= while the
Swiss franc traded at 0.9102 to the dollar CHF= , near its
highest in three weeks.
Sterling traded above the key $1.30 level as hopes for a
Brexit deal offset concern about pressure on the economy from
new coronavirus restrictions British Prime Minister Boris
Johnson has announced. The pound stood near its strongest levels in two weeks
against the euro, which changed hands at 0.9043 pound EURGBP= .
On the other hand, the Australian dollar dropped as much as
0.6% to $0.7165 AUD=D4 , not helped by media reports China has
stopped taking shipments of Australian coal. "Despite the positive risk sentiment, the Aussie appears to
have been well contained by further indications that Chinese
imports of met and thermal coal have been banned. This is
important given that 22% of Australian thermal coal exports went
to China in the last year and 28% of met coal," said Rob Rennie,
head of financial market strategy at Westpac.
"We stick to the view that the near-term risks for the A$
are lower and a dip below 0.70 through end October/ early
November is still possible."