FOREX-Dollar steadies as markets await Trump-Biden debate

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Eimi Yamamitsu
TOKYO, Sept 29 (Reuters) - The dollar was steady against a
basket of currencies on Tuesday as traders looked out to the
first U.S. presidential debate and developments on the U.S.
stimulus bill.
The dollar index stood unchanged at 94.150 =USD , drifting
away from a two-month high of 94.745 reached last week, as stock
markets made solid gains partly on upbeat China data with Wall
Street rebounding following last week's selloff.
All eyes are on the first U.S. presidential election debate
where Democrat Joe Biden and Republican Donald Trump will square
off later in the day (Wednesday 0100 GMT).
"If the debate puts Trump on the back foot and Biden keeps
his lead, I think it could lead people to let go of their
dollars," said Daisuke Karakama, chief market economist at
Mizuho Bank.
“The dollar market has been broadly bottoming out from low
prices since mid-September. The question is what would be the
trend in October,” Karakama said, adding that market
participants are also keeping a close watch on any stimulus
package plans.
House speaker Nancy Pelosi said on Monday the Democratic
lawmakers were unveiling a new $2.2 trillion coronavirus relief
bill, which was a compromise measure that reduces the costs of
the economic aid. Markets are also braced for a slew of data to gauge the
health of the world's biggest economy ahead of the election,
analysts say, including Tuesday's consumer confidence, a
manufacturing survey and consumer data on Thursday as well as
jobs report on Friday.
Sterling outperformed other currencies, extending overnight
gains on optimism about a Brexit trade deal as the European
Union and Britain kicked off a decisive week of talks.
The British pound was fetching $1.2875 GBP=D3 in Asian
trade, having touched $1.2930 overnight.
Against the euro, sterling changed hands at 90.74 pence
EURGBP=D3 .
While both the EU and Britain said a post-Brexit agreement
was still some way off, European Commission chief Ursula von der
Leyen said a deal was still possible. Separately, Bank of England Deputy Governor Dave Ramsden
said he thought the floor for the central bank's key interest
rate was 0.1%, but the BoE was "duty-bound" to consider pushing
the rates below zero. The euro changed hands at $1.1678 EUR= , with gains capped
by European Central Bank President Christine Lagarde's remarks
that the external value of the shared currency has an impact on
inflation, and that policymakers will monitor currency
movements. As Europe grapples with a surge in new COVID-19 infections,
traders will be looking out for euro zone consumer confidence
and industrial sentiment data for September for signs of any
impact on the region's economic recovery.
Elsewhere, the dollar edged lower against the yen at 105.43
yen JPY= . Data on Tuesday showed Tokyo's core consumer prices
fell 0.2% in September, the latest evidence of the lingering
impact of the coronavirus on business activity. The Antipodean currencies gained moderately, with the
Australian dollar AUD=D3 last trading at $0.7093 while the
kiwi NZD=D3 sat at $0.6566.