FOREX-Dollar soft as U.S. stimulus hopes, Trump discharge boost risk sentiment

* Renewed hopes of U.S. stimulus support riskier currencies
vs USD
* Trump's return to White House spurs unwinding of risk-off
bets
* Aussie dollar looks to RBA, budget
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano
TOKYO, Oct 6 (Reuters) - The dollar was softer against
riskier currencies on Tuesday on rising optimism that U.S.
lawmakers could agree on new stimulus to blunt the economic
impact of the coronavirus.
Risk appetite also improved after U.S. President Donald
Trump left the hospital and returned to the White House
following treatment for COVID-19.
"I think hopes of U.S. stimulus are the main driving force,"
said Masafumi Yamamoto, chief currency strategist at Mizuho
Securities.
"As for Trump's discharge, the impact is not clear-cut but
it is seen as positive for risk environment to the extent that
there are less worries about the White House getting caught in
complete chaos and unable to make decisions," he said.
The euro traded at $1.1788 EUR= , following a gain of 0.58%
on Monday.
The pound changed hands at $1.2990 GBP=D4 , tackling its
resistance around $1.30, despite concerns about a no-deal
Brexit.
The dollar advanced on the safe-haven yen to 105.77 yen
JPY= , near its highest levels in three weeks.
The dollar's index against a basket of six major currencies
=USD dropped to 93.422, touching its lowest level in two
weeks.
U.S. House Speaker Nancy Pelosi and Treasury Secretary
Steven Mnuchin spoke by phone for about an hour on Monday on
coronavirus economic relief and were preparing to talk again
Tuesday, continuing their recent flurry of activity working
towards a deal on legislation. White House Chief of Staff Mark Meadows said there is still
potential for an agreement among lawmakers in Washington on more
economic relief, and that Trump is committed to getting the deal
done. However, the renewed efforts in Congress to reach an
agreement on relief funds for the pandemic-hit economy has been
complicated by the spread of the coronavirus among key policy
makers including Trump.
The president returned to the White House on Monday after a
three-night hospital stay for COVID-19 treatment though White
House physician warned he may not be out of the woods yet.

Among the currencies that are not included in the dollar
index, the offshore Chinese yuan extended gains to reach 6.7208
per dollar CNH=D4 , its highest level since April last year.
The Australian dollar stood at $0.7192 AUD=D4 , ahead of a
policy announcement from the Reserve Bank of Australia at 2:30
p.m. (0330 GMT).
Some markets are expecting a cut in its benchmark interest
rates to 0.10% from the current 0.25%.
Currency traders are also focussed on the government's
annual budget with Canberra widely expected to keep the fiscal
tap open for years to come.