* Euro-dollar little moved in early European trading
* FX markets in wait-and-see mode before U.S. election
* Swiss franc, yen edge higher, suggesting some caution
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tommy Wilkes
LONDON, Oct 27 (Reuters) - The U.S. dollar clung to gains on
Tuesday, but other safe-haven currencies were mostly quiet as
investors sat on the sidelines ahead of next week's U.S.
election, even as worries about a second wave of COVID-19 and
economic impact rose.
Monday saw the steepest stock market sell-off in a month and
a bond rally, but foreign exchange market activity has remained
relatively muted, with price moves in early Tuesday limited.
That said, analysts warned investors were clearly cautious
after the United States, Russia and France all hit new daily
records for coronavirus infections. They said prices were not
moving much because of a reluctance to build positions in the
run-up to the U.S. Presidential election on Nov. 3.
Euro-dollar was last at $1.18045 EUR=EBS , little changed
on the day.
The dollar index, which measures the greenback against a
basket of currencies, edged slightly higher to 93.121 =USD .
The yen and the Swiss franc, both of which investors tend to
flock towards when nervous, inched higher JPY=EBS CHF=EBS
EURCHF=EBS .
"Many sources of uncertainty are still preventing clearer
trends from emerging," UniCredit analysts said in a research
note.
"The impasse on both U.S. budget talks and Brexit
negotiations, as well as the implications of rising COVID-19
infections on 4Q20 GDP growth, play in favor of more euro-dollar
and sterling-dollar stabilization for now," they said, pointing
to levels of "just above $1.18 and $1.30, respectively."
The usually risk-sensitive Australian AUD=D3 and New
Zealand dollars NZD=D3 dipped only slightly overnight and were
stronger in early European trading.
Sterling GBP=D3 slipped overnight but was back above $1.30
on Tuesday at $1.3020. It was marginally lower versus the euro
at 90.79 pence EURGBP=D3 .
National Australia Bank senior FX strategist Rodrigo Catril
said many investors did not want to take on new positions before
the U.S. election.
"I think many would probably remember the bad experiences we
had going in to the Trump-Clinton election (in 2016)," said
Catril.
"If you had a position on, you would have been whipsawed big
time. I think the strategy this time is to travel light, and to
choose the opportunity on the day rather than take on a very,
very strong position going into the election."
A week out from polling day, national polls give Democrat
Joe Biden a solid lead but the contest is much tighter in
battleground states that could decide the outcome. Analysts regard a Biden victory, and especially Democrat
control of the Senate, as negative for the dollar since it is
expected to deliver big stimulus spending that would boost
investor sentiment and drive demand for riskier currencies.