CORRECTED-FOREX-Dollar flirts with 3-wk low as investors count on eventual stimulus

(Corrects day in par 1 to Tuesday not Friday)
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano
TOKYO, Oct 13 (Reuters) - The dollar flirted with three-week
lows on Tuesday as investors stuck to hopes that there will be
large U.S. fiscal stimulus after the Nov. 3 election to shore up
a pandemic-hit economy, supporting riskier currencies.
The dollar index stood at 93.036 =USD , just above Friday's
near-three-week low of 92.997. The euro traded at $1.1841
EUR= , having gained 0.60% on Monday.
"It seems there is a strong optimism that eventually there
will be stimulus. It is hard to argue against fiscal expansion
given the coronavirus epidemic is almost like a natural
disaster," said Makoto Noji, chief currency and foreign bond
strategist at SMBC Nikko Securities.
While markets are getting sceptical about the chances of
having a bipartisan package before the election, a widening lead
by Democratic presidential candidate Joe Biden over President
Donald Trump is leading investors to expect big stimulus after
the election.
A Biden victory is also seen as negative for the dollar
partly because his pledge to hike corporate tax would reduce
returns from investments in the United States.
Thus the dollar also weakened against currencies that are
deemed "safer" - those that tend to have small or inverse
relations with risk sentiment - such as the yen and the Swiss
franc.
The yen strengthened to 105.34 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 concerns 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 0.4% to
$0.7183 AUD=D4 , not helped by media reports China has stopped
taking shipments of Australian coal. The offshore Chinese yuan nursed losses after China's
central bank removed reserve requirement ratio for financial
institutions when conducting some foreign exchange forwards
trading, a move seen as a bid to curb recent yuan appreciation.
The yuan last stood at 6.7626 to the dollar CNH= , off
Friday's 1 1/2-year high of 6.6785.