FOREX-Dollar holds gains on U.S. election caution, COVID-19 cases

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

TOKYO, Nov 2 (Reuters) - The U.S. dollar held steady on
Monday as investors readied for this week's U.S. presidential
election, while a surge in global coronavirus cases continued to
weigh on sentiment.
The greenback held onto its gains after posting its largest
weekly percentage rise since late September in the previous
trading session.
Investors are sticking to the safe-harbour currency as
Tuesday's presidential election keeps financial markets on edge.
Democratic challenger Joe Biden leads in national opinion
polls though the race is seen as close in enough battleground
states that President Donald Trump could achieve the 270 votes
needed to win in the state-by-state Electoral College that
determines the overall victor. "Currency volatility can extend well beyond Election Day
because there is a high risk the losing candidate will dispute
the election results. The 2000 election took around one month to
resolve the disputes," analysts at Commonwealth Bank of
Australia said in a client note.
The dollar index, which tracks the greenback against a
basket of major currencies, last sat at 94.058 =USD , near its
four-week high.
Meanwhile, the novel coronavirus continues to ravage
already-battered economies. Europe's new COVID-19 cases have
doubled in five weeks, a Reuters tally showed, with total
infections surpassing 10 million. The euro steadied in early Asian trade but was close to
hitting long-term lows against the greenback and Japanese yen.
It last fetched $1.1647 EUR=EBS , a fraction away from a
four-week low of $1.1640 marked last week, while against the
yen, the common currency changed hands at 121.90 EURJPY= .
"The euro has been selling since infection cases and
lockdowns stood out in Europe," said Daisuke Uno, chief
strategist at Sumitomo Mitsui Bank.
"But infection cases in other countries, like the U.S., have
been on a rise as well. As time goes on, I think increasing
coronavirus cases and lockdowns will be common topics in any
country, to the extent that they are no longer themes for the
currency market," he said.
With more than 20,000 new coronavirus cases a day in
Britain, Prime Minister Boris Johnson on Saturday announced a
lockdown across England that will last until Dec. 2. A senior
cabinet member said on Sunday the lockdown could be extended.
Sterling traders also continue to eye updates on Brexit
trade talks. EU and British Brexit negotiators will continue
talks in Brussels on Monday until around mid-week, people on
both sides told Reuters, in a sign of continued efforts to avoid
a breakdown in trade when their deal deadline ends in less than
nine weeks. Against the dollar, the pound was last down 0.2% to $1.2928
GBP=D3 .
The greenback was little changed against the yen at 104.67
yen JPY=EBS , away from a five-week trough of 104.02 hit on
Thursday.
Elsewhere, the risk-sensitive Australian dollar AUD=D3 was
at $0.7014, after slipping around 0.4% to $0.7000, its lowest
since July.
Besides the U.S. presidential election, this week is filled
with economic data, including PMI data from China, U.S. and
elsewhere, as well as U.S. non-farm payrolls and Chinese trade.
Three central banks are also due to announce policy
decisions this week. The Reserve Bank of Australia meets on
Tuesday, while the Bank of England and U.S. Federal Reserve
deliver their decisions on Thursday.