FOREX-Dollar drops as stocks surge, Fed keeps policy unchanged

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

(Adds Fed statement, quote, updates prices)
By Karen Brettell
NEW YORK, Nov 5 (Reuters) - The U.S. dollar fell to a
two-week low against a basket of currencies and a seven-month
low against the Japanese yen as surging stock markets reduced
demand for the greenback, and as the Federal Reserve kept its
loose monetary policy intact.
Stocks jumped as bets on Republicans retaining control of
the Senate eased worries of major policy changes that could hurt
corporate America under a Joe Biden White House, even as the
presidential election hung in the balance. .N
Democrat Biden on Thursday inched nearer to victory over
President Donald Trump in an exceedingly close U.S. election
that hinged on razor-thin margins, while the Republican
president launched a flurry of lawsuits hoping to slow down his
opponent. But the so called "blue wave," where Democrats also take
control of the Senate in congressional elections, looked
unlikely.
“The investor class loves the idea of a Democratic president
and a Republican Senate that will return back to essentially a
steady, normal state of affairs,” said Boris Schlossberg,
managing director of FX strategy at BK Asset Management in New
York.
The dollar index fell 0.95% against a basket of currencies
=USD to 92.51.
The euro EUR= jumped 0.99% to $1.1838. The dollar dropped
0.95% against the Japanese yen JPY= to 103.49 yen, the lowest
since March 12, and breached technical support at 104 yen that
will now likely form resistance.
The yuan CNH= gained to a more than two-year high of
6.5994. The Chinese currency has been heavily affected by
Sino-U.S. disputes since the outbreak of a bilateral trade war
in 2018.
The dollar has been hurt by the Fed's zero rate policy and
ongoing bond purchases as the U.S. central bank aims to
stimulate growth after the economy was ravaged by business
shutdowns due to COVID-19.
The U.S. central bank on Thursday pledged again to do
whatever it can in coming months to sustain a U.S. economic
recovery. It was "virtually unchanged from the previous meeting's
message," said Lou Brien, a market strategist at DRW Trading in
Chicago.
Some analysts say the Fed may need to act further to boost
the economy if there is no large fiscal spending, though others
note that it is running out of tools.
If Treasury yields rise meaningfully the Fed is expected to
shift more of its bond purchases to longer-dated debt to keep
the rates low.

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Currency bid prices at 3:00PM (2000 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1838 $1.1722 +0.99% +5.60% +1.1859 +1.1712
Dollar/Yen JPY= 103.4900 104.4800 -0.95% -4.93% +104.5500 +103.4900
Euro/Yen EURJPY= 122.51 122.53 -0.02% +0.46% +123.1600 +122.2200
Dollar/Swiss CHF= 0.9039 0.9124 -0.93% -6.56% +0.9135 +0.9044
Sterling/Dollar GBP= 1.3143 1.2985 +1.22% -0.88% +1.3146 +1.2932
Dollar/Canadian CAD= 1.3035 1.3139 -0.79% +0.41% +1.3177 +1.3028
Australian/Doll AUD= 0.7283 0.7173 +1.53% +3.73% +0.7289 +0.7146
ar
Euro/Swiss EURCHF= 1.0705 1.0690 +0.14% -1.35% +1.0726 +1.0687
Euro/Sterling EURGBP= 0.9005 0.9025 -0.22% +6.52% +0.9071 +0.8997
NZ NZD= 0.6771 0.6694 +1.15% +0.52% +0.6777 +0.6680
Dollar/Dollar
Dollar/Norway NOK= 9.1703 9.3174 -1.58% +4.46% +9.3675 +9.1472
Euro/Norway EURNOK= 10.8578 10.9269 -0.63% +10.37% +10.9740 +10.8218
Dollar/Sweden SEK= 8.6972 8.7772 +0.01% -6.96% +8.8034 +8.6657
Euro/Sweden EURSEK= 10.2940 10.2928 +0.01% -1.67% +10.3180 +10.2680