FOREX-Dollar claws back losses as Trump takes narrow early lead in Florida

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

By Hideyuki Sano and Eimi Yamamitsu
TOKYO, Nov 4 (Reuters) - The U.S. dollar clawed back early
losses against risk-sensitive currencies on Wednesday after
preliminary results suggested President Donald Trump has a
slight edge over Democratic challenger Joe Biden in Florida, a
key battleground state.
That undercut rising expectations in markets this week that
Biden will likely win the presidency and adopt a large stimulus
to support the economy.
"If Biden won Florida, he was almost certain to win the
entire race but uncertainties seem high and we are seeing a
correction in risk-on trades," said Yujiro Goto, head of FX
strategy at Nomura Securities.
Trump was narrowly leading Biden in Florida, while other
competitive swing states that will help decide the election
outcome, such as Georgia and North Carolina, remained up in the
air. The dollar index measuring the greenback against a basket of
currencies =USD stood at 93.626, flat on the day. It had shed
0.9% on Tuesday, its biggest daily drop since late March as
traders had bet on a Biden victory.
A win for Biden, expected to be less confrontational in
trade issues with China and other trade partners than Trump,
could be a boon for currencies that have suffered from tariffs
imposed by the president.
The euro fetched $1.1707 EUR= , down 0.1% on the day after
having climbed as high as $1.1770 earlier.
The British pound dipped 0.2% to $1.3036 GBP= , erasing
earlier gains of 0.6%. The Australian dollar gave up 0.2% to
$0.7143 AUD=D4 .
The safe-haven yen was little changed at 104.59 per dollar
JPY= .
The offshore Chinese yuan, seen as a currency that has much
to lose if Trump wins due to his hawkish stance on China on
trade and several other issues, dropped 0.25% to 6.6959 dollar
CNH= .
Investors were braced for the possibility that the election
results may not become clear on Wednesday, with markets hedging
against the risk of a contested election or a potentially drawn
out process as mail in ballots were counted.
"A contested election probably takes all of the SPX, Bond
yields and the USD (at least versus majors) down meaningfully,"
said Alan Ruskin, chief international strategist at Deutsche
Bank in New York.