FOREX-Dollar soft as traders expect stimulus and await U.S. jobs data

* Dollar tracking toward weakest week since late August
* Quiet trade ahead of U.S. non-farm payrolls at 1230 GMT
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, Oct 2 (Reuters) - The dollar drifted toward
posting its softest week in more than a month on Friday, as
revived hopes for a new U.S. stimulus package to boost the
world's biggest economy had investors seeking out riskier
currencies.
Against a basket of six majors =USD , the dollar held near
a one-month low in Asia and has slipped 0.9% this week, its
largest weekly loss since late August.
The New Zealand dollar NZD=D3 made a fresh one-week peak
of $0.6659, while the euro and Aussie held just below week highs
made overnight.
Moves in morning trade were small, however, with signs of an
impasse on Capitol Hill and the risk of disappointment at U.S.
jobs data due later in the day holding investors back.
U.S. House Speaker Nancy Pelosi and Treasury Secretary
Steven Mnuchin failed on Thursday 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 risk-sensitive Australian dollar AUD=D3 was last
steady at $0.7182 after climbing as high as $0.7209 overnight.
It has so far posted a weekly gain of 2.2%, its best since late
August. AUD/
The Japanese yen on the other hand, a safe-haven currency
that tends to gain during periods of uncertainty, barely moved
this week, suggesting a degree of caution remains. The yen
JPY= last traded at 105.55 per dollar.
Sterling had a bumpy overnight session, bouncing around on
conflicting Brexit headlines before ultimately sinking as the
European Union began legal proceedings over a British plan to
undercut their divorce deal. The pound GBP= recovered from a low of $1.2819 to steady
at $1.2884 in Asian trade. The euro EUR= held at $1.1744.
The Chinese yuan CNH= hovered just shy of a 16-month high
it made in offshore trade on Thursday. Volumes were thinned by
holidays in China that have markets closed until Oct. 9.
Investors are watching with concern as coronavirus infection
rates climb in Europe and the U.S. and awaiting crucial U.S.
labour figures for a read on the economic recovery.
Madrid will become the first European capital to go back
into lockdown in coming days to fight a steep surge in cases. A
record increase in new cases in Wisconsin on Thursday, fanned
fears of hospitals there being overwhelmed.
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.