* Trump aide tests positive to COVID-19, stimulus talks
stall
* AUD -0.3%, EUR -0.3%, though both still up for week
* U.S. jobs data at 1230 GMT eyed
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Oct 2 (Reuters) - The dollar climbed on Friday as
doubts crept in about the prospects of a new U.S. stimulus
package and President Donald Trump entered quarantine after a
close aide caught COVID-19, prompting investors to trim bets on
riskier currencies.
The dollar index =USD rose 0.2%, though it remains set for
its softest week in more than a month as stimulus hopes stoked
appetite for riskier assets earlier in the week. It has lost
0.7% since last Friday's close.
Likewise the risk-sensitive Australian dollar AUD=D3 fell
0.4% to $0.7157 on Friday but remains up 1.8% for the week. The
euro EUR= fell 0.3% to $1.1715 on Friday.
"Wait and hope or wait and worry - the market is hovering
between these two," said Bank of Singapore FX analyst Moh Siong
Sim, as the stimulus deal and a Trump virus test hang in the
balance, and with crucial U.S. data also due later on Friday.
Trump said on Twitter that he and first lady Melania would
go into quarantine as they await their own test results after
adviser Hope Hicks tested positive for COVID-19. House Speaker Nancy Pelosi and Treasury Secretary Steven
Mnuchin have also so far failed to bridge what Pelosi described
as differences over dollars and values. Analysts view their talks as a last-gasp effort to secure
relief ahead of the Nov. 3 election for tens of millions of
Americans and business including U.S. airlines, which have begun
furloughing over 32,000 workers. "Markets surely remain susceptible to the lack of a deal
this side of the election," said National Australia Bank's head
of foreign exchange strategy, Ray Attrill.
The safe-haven Japanese yen JPY= ticked lower on Friday,
easing 0.1% to 105.64 per dollar. But it has not been swept up
in the week's positive mood and is flat for the week.
Sterling remained under pressure on Friday after sinking on
Thursday as the European Union began legal proceedings over a
British plan to override parts of their divorce deal.
The pound GBP= was last down 0.2% at $1.2859.
"Both the US fiscal stimulus and Brexit negotiations are not
closer to a deal," said OCBC Bank strategist Terence Wu in
Singapore.
JITTERS
Investors are also watching with concern as coronavirus
infection rates climb in Europe and the United States, while
awaiting U.S. labour figures for a read-out on the economic
recovery.
U.S. non-farm payrolls likely increased by 850,000 jobs in
September, according to a Reuters survey of economists. That
would leave employment 10.7 million below its level in February.
Data is due at 1230 GMT.
In the United States, a record increase in new cases in
Wisconsin on Thursday fanned fears of hospitals there being
overwhelmed. Elsewhere, Madrid will become the first European capital to
go back into lockdown in coming days to fight a steep surge in
cases.
Commodities, notably copper and crude oil, slid on
persistent worries about global growth. O/R MET/L
"Let's not get ahead of ourselves in terms of market
sentiment, and we think it is too early to re-embrace the
risk-on / weak dollar dynamic just yet," said OCBC's Wu.