FOREX-Risk-off sentiment boosts U.S. dollar, pound drops

* Euro down vs dollar
* Dollar gains vs peer safe-haven yen
* Sterling gives back all of prior session's gains
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Adds details, updates prices; previous LONDON)
By Chuck Mikolajczak
NEW YORK, Oct 15 (Reuters) - The dollar climbed on Thursday
along with the safe-haven yen as signs the U.S. economy was
stalling while fiscal stimulus appeared unlikely before the
U.S. presidential election kept investors in a risk-off stance.
The dollar strengthened as U.S. equities dropped on the
heels of data that showed the labor market recovery is losing
steam, while manufacturing activity in New York fell more than
anticipated.
Weekly jobless clams rose to 898,000, up 53,000 from the
prior week and above the 825,000 estimate, increasing concerns
the COVID-19 pandemic was causing lasting damage to the labor
market.
The Australian dollar hit a two-week low on Thursday after
the head of the central bank hinted at possible monetary easing,
while the risk-off sentiment kept the U.S. dollar supported and
most other major currencies on the defensive.
After saying a stimulus deal before the Nov. 3 election
would be hard, U.S. Treasury Secretary Steven Mnuchin said he
will keep trying to reach a deal on coronavirus relief with
House Speaker Nancy Pelosi before that date. "There is still plenty of distance between all parties that
have a role to play in an agreement and the assumption the
market has that a deal is coming sooner rather than later is
being challenged," said portfolio manager Keith Buchanan at
GLOBALT Investments in Atlanta, Georgia.
"That challenge becomes more and more apparent every day
that ticks by without a significant progression as far as
negotiations are concerned and we are just not seeing it."
The dollar index =USD rose 0.504% after touching a
one-week high of 93.878.
The British pound, lifted on Wednesday by signs of progress
in Brexit talks, relinquished those gains on Thursday as
concerns about trade talks with Europe resurfaced and London
faced tighter coronavirus restrictions. Sterling GBP= was last trading at $1.2893, down 0.91% on
the day.
European Union leaders said agreeing to a "fair" new
partnership with Britain was "worth every effort" but the bloc
would not compromise at any cost and was ready for an abrupt
split in trade worth a trillion euros every year. France has imposed curfews as coronavirus infections rise,
and other European Union members were also responding to spiking
new cases with fresh restrictions.
Markets fear a new wave of lockdowns could stall the global
recovery at a time hopes for U.S. stimulus before the Nov. 3
election are fading, ditching riskier assets such as equities in
favor of safe-havens such as the dollar and the yen.
While weaker against the dollar, the Japanese yen
strengthened 0.30% versus the euro. Bloomberg reported the
European Central Bank "sees little reason" to rush into a new
stimulus this month even as coronavirus cases spike and the
economy slows.
The euro EUR= was down 0.49% to $1.1688 against the
greenback.