* Dollar falls broadly
* Currencies price in low chance of big U.S. stimulus
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Adds comments on jobs report, updates prices; previous LONDON)
By David Henry
NEW YORK, Nov 6 (Reuters) - The dollar sank to its lowest
level in over two months against a basket of peer currencies on
Friday, as vote counting for the contentious U.S. elections
slowly moved toward a divided government and investors predicted
more losses for the currency.
Investors are betting that Democrat Joe Biden will become
the next president but Republicans will retain control of the
Senate, which will make it difficult for the Democrats to pass
the larger coronavirus relief package they have been pushing.
The need for more stimulus was underlined on Friday when the
U.S. government reported that employers hired the fewest workers
in five months in October. It was the clearest evidence yet that
the end of previous fiscal stimulus and exploding new
coronavirus infections were sapping momentum from the economic
recovery. "We're still left with the view that the U.S. economy is
decelerating, and that's playing out in a markedly weaker
dollar," said Joe Manimbo, senior market analyst at Western
Union Business Solutions.
Biden maintains an edge over Republican President Donald
Trump, but a few important states are still counting votes and
Trump is mounting legal challenges to ballot counts, so there is
still a high degree of uncertainty. The surge of new coronavirus cases to record levels in
several U.S. states could also curb economic activity.
The dollar index =USD fell against a basket of six major
currencies to 92.461, hitting its lowest level since Sept. 2.
For the week, the dollar index was down as much as 1.7%, on
course for its biggest drop in almost four months.
A large decline in long-term Treasury yields due to
expectations for less fiscal stimulus, combined with a rally in
equities and other riskier assets, has placed the dollar under
consistent selling pressure that is likely to continue.
"So far investors have been prepared to overlook the threat
of a contested election, presumably seeing Donald Trump's legal
initiatives as 'frivolous' and these benign conditions have
generated a broad-based dollar decline," said strategists at
ING.
The dollar fell further against the Japanese yen, trading at
103.58 yen JPY=D3 on Friday, close to an eight-month low.
Japanese Prime Minister Yoshihide Suga has vowed to work
closely with overseas authorities to keep currency moves stable,
because a strong yen is widely viewed as a threat to Japan's
economy. The recent currency moves have been big enough to set up a
brief reversal. "We could see some end-of-week profit-taking
catch up with the euro and the yen," Western Union Business
Solutions' Manimbo said. "But it looks like there's the
potential for dollar sentiment to continue to erode in the weeks
ahead."
The onshore yuan CNY=CFXS fell to 6.618 per dollar but
still remained close to its more than two-year high reached on
Thursday.
Many investors expect a Biden administration would slightly
scale back Trump's trade war with China, which should benefit
the yuan.
Against a buoyant euro EUR=EBS , the dollar traded at
$1.1858 after falling 0.87% in the previous session.
The single currency has risen sharply this week on the
dollar's weakness, but has also benefited from news of the
European Union inching closer to a budget deal.
========================================================
Currency bid prices at 9:57AM (1457 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1858 $1.1828 +0.26% +5.78% +1.1891 +1.1796
Dollar/Yen JPY=D3 103.5850 103.5500 +0.08% -4.59% +103.7500 +103.1950
Euro/Yen EURJPY= 122.82 122.40 +0.34% +0.71% +122.9300 +122.2300
Dollar/Swiss CHF=EBS 0.9017 0.9042 -0.27% -6.81% +0.9056 +0.8985
Sterling/Dollar GBP=D3 1.3108 1.3153 -0.33% -1.15% +1.3156 +1.3094
Dollar/Canadian CAD=D3 1.3067 1.3046 +0.17% +0.59% +1.3096 +1.3038
Aussie/Dollar AUD=D3 0.7246 0.7285 -0.52% +3.29% +0.7287 +0.7239
Euro/Swiss EURCHF= 1.0690 1.0694 -0.04% -1.49% +1.0703 +1.0676
Euro/Sterling EURGBP= 0.9046 0.8991 +0.61% +6.98% +0.9055 +0.8990
NZ NZD=D3 0.6765 0.6774 -0.15% +0.52% +0.6801 +0.6756
Dollar/Dollar
Dollar/Norway NOK=D3 9.1855 9.1700 +0.23% +4.78% +9.2395 +9.1425
Euro/Norway EURNOK= 10.8985 10.8550 +0.40% +10.78% +10.9345 +10.8294
Dollar/Sweden SEK= 8.6645 8.6959 -0.03% -7.31% +8.7300 +8.6361
Euro/Sweden EURSEK= 10.2749 10.2782 -0.03% -1.86% +10.3155 +10.2580
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Dollar falls to 2-month low https://tmsnrt.rs/2GxqA2M
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