FOREX-Safe-haven dollar up as coronavirus surges, US stimulus hope fades

* Chinese yuan hits 1-week low vs dollar
* Nokkie, Aussie dollar losers in G10 space
* British pound rises vs dollar, euro
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Updates prices, adds German Ifo, new comment and detail)
By Olga Cotaga
LONDON, Oct 26 (Reuters) - The dollar gained on Monday, as
surging coronavirus cases in Europe and the United States and a
lack of progress on a U.S. stimulus package made traders turn to
the safe-haven currency.
U.S. House Speaker Nancy Pelosi said on Sunday she expected
a White House response on Monday to the latest stimulus plan,
but there is little evidence a deal is close. The United States has recorded its highest number of new
COVID-19 cases for two consecutive days and so has France. Spain
announced a new state of emergency and Italy has ordered
restaurants and bars to shut by 6 p.m. Media reports that the Oxford/AstraZeneca vaccine has proved
successful in elderly people and that staff at a major British
hospital were told to prepare for it as early as next month were
not enough to bolster sentiment. But Stephen Innes, chief global market strategist at broker
Axi, said the news may have prevented a deeper sell-off.
"Fortunately, there are several vaccines in the pipeline, or
we could have been looking at a pretty significant market reset
this morning with COVID-19 flash points flaring up in virtually
every corner of the globe this weekend," he said.
An index tracking the U.S. dollar against a basket of
currencies was last up 0.1% at 92.92 =USD .
Euro/dollar - the most traded currency pair and part of the
index - fell 0.3% at 1.1826 EUR=EBS . It has slipped earlier by
half a percent after the German Ifo business climate index fell
for the first time in six months in October. The dollar also rose 0.1% against the Japanese yen at 104.85
JPY=EBS .
Hedge funds remain short the U.S. dollar, the latest data
from the Commodity Futures Trading Commission showed, though the
number of shorting contracts declined in the last couple of
weeks. NETUSDG10=
"What will drive the U.S. dollar this week is the ultimate
trend in equities and the steepness of the U.S. Treasury
two-year and 10-year curve," said Stephen Gallo, currency
analyst at BMO Capital Markets. "Firmer equities yield a steeper
curve, which yields a weaker dollar."
U.S. 10-year Treasury yields fell to their lowest since
Wednesday US10YT=RR .
The Chinese yuan was down 0.5% against the U.S. dollar at
6.6982 in the offshore market CNH=EBS - a one-week low - in a
sign of caution as the Chinese government began discussions on
its next five-year plan.
Some other losers included the Norwegian crown and the
Australian dollar, as they retreated from last week's gains
driven by traders taking on more risk. Both fell in early
European trading, but rebounded slightly afterwards.
The Aussie dollar was last flat at 0.7138 AUD=D3 . The
crown was down 0.2% at 9.2520 against the dollar NOK=D3 ,
having seen nearly 1% drop earlier and stabilised against the
euro EURNOK=D3 at 10.9410.
Norway is due to join other countries this week in
announcing stricter measures to limit the spread of the
coronavirus. Traders will be watching for the new U.S. home sales later
in the day, as well as consumer confidence index and durable
goods data.
Elsewhere, the British pound recovered the lost ground,
rising by 0.1% to $1.3057 GBP=D3 and by 0.4% against the euro
to 90.56 pence EURGBP=D3 .