* Yen near 2-week peak, dollar firm
* AUD drops after RBA Gov Lowe opens door to bond buying,
cuts
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Oct 15 (Reuters) - The dollar and yen drew
support on Thursday as rising coronavirus cases and scant
progress towards a U.S. stimulus deal unsettled investors, while
the Australian dollar hit a one-week low after the central bank
chief hinted at easing to come.
France has imposed curfews as autumn brings a steep rise in
daily infections, prompting worries about a new wave of
lockdowns around the world just as hopes for a shot in the arm
from U.S. stimulus spending are fading. The safe-haven yen JPY= stood at 105.25 per dollar in
early trade, a fraction shy of a two-week high of 105.04 made
overnight. The greenback held ground elsewhere, save for against
sterling which had jumped on signs of progress in Brexit talks.
The Australian dollar AUD=D3 fell half a percent to
$0.7129, before paring some losses, after Reserve Bank of
Australia Governor Philip Lowe mentioned bond buying and a small
rate cut as among options for policy support during recovery.
Lowe said Australia's ten-year yield was among the highest
in the developed world and the bank was studying what benefits
could come from buying longer-dated debt. He said it was
possible to move rates from a record low 0.25% to 0.1%.
"These are pretty explicit policy options that are plausibly
going to be considered," said Westpac FX analyst Sean Callow.
"There was enough vibe in there for the market to lean
towards (thinking) that they will do something," he said.
"Anyone who was thinking about a November cut would be feeling
better about it now."
Ten-year bond futures YTCc1 rallied 6.6 ticks to their
highest since April after Lowe's comments and money markets are
priced for a November rate cut. 0#YIB
Slightly better-than-expected Australian employment data on
Thursday did little to shift easing expectations or lift the
currency. Elsewhere, U.S. stimulus plans appear bogged down.
"Getting something done before the election and executing on
that would be difficult," U.S. Treasury Secretary Steve Mnuchin
said on Wednesday, adding that the he and Democrat House Speaker
Nancy Pelosi are still "far apart" on their spending priorities.
That has supported the U.S. dollar in the short term by
weighing on investors' sentiment and boosting demand for safer
assets. Against a basket of currencies the greenback was steady
at 93.400 =USD and held at $1.1749 against the euro EUR= .
The pound GBP= clung to a 0.5% overnight gain as the
European Union and Britain were set to prolong Brexit talks past
a mid-October deadline to try bridge stubborn gaps holding up a
new trade agreement, according to sources and documents.
"This was seen as a positive for sterling because there was
some risk that (British Prime Minister Boris Johnson) might tell
his EU counterparts that he was walking away," said National
Australia Bank's head of FX, Ray Attrill.
Sterling last sat at $1.3018.
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Currency bid prices at 8:52AM (052 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1749 $1.1745 +0.03% +4.80% +1.1751 +1.1741
Dollar/Yen JPY=D3 105.2550 105.1150 +0.12% -3.10% +105.2650 +105.1500
Euro/Yen EURJPY= 123.65 123.50 +0.12% +1.39% +123.6700 +123.4800
Dollar/Swiss CHF=EBS 0.9134 0.9135 -0.03% -5.63% +0.9136 +0.9132
Sterling/Dollar GBP=D3 1.3018 1.3010 +0.08% -1.82% +1.3021 +1.3008
Dollar/Canadian CAD=D3 1.3151 1.3151 +0.02% +1.25% +1.3156 +1.3148
Aussie/Dollar AUD=D3 0.7136 0.7163 -0.37% +1.71% +0.7169 +0.7129
NZ NZD=D3 0.6653 0.6660 -0.11% -1.13% +0.6662 +0.6648
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX