* Dollar makes small broad gains in Asia
* Sterling steady as Brexit breakthrough hopes support
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Oct 26 (Reuters) - The dollar found support on
Monday, as surging coronavirus cases in Europe and the United
States and a lack of progress toward a U.S. stimulus package put
traders in a cautious mood, although hopes for a Brexit trade
deal held sterling steady.
Against a basket of currencies =USD , the greenback trod
water in the Asia session, after having fallen broadly last
week. Against the risk-sensitive Australian dollar and against
the euro it gained about 0.2%.
Sterling GBP= , however, held firm at $1.3024.
The United States has recorded its highest ever 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. U.S. House Speaker Nancy Pelosi said on Sunday that she
expected a White House response on Monday regarding the latest
stimulus spending plan, but there have been few tangible signs
that a long-stalled deal is actually nearer. "The combination of receding hopes for a pre-election fiscal
deal and the news on COVID and potentially stricter lockdowns is
enough to take a bite out of the stock market," said Ray
Attrill, head of FX strategy at National Australia Bank.
He said half-percent dip in S&P 500 futures ESc1 had
spilled over into currency markets, where traders are also in a
cautious mood ahead of the U.S. election on Nov. 3. MKTS/GLOB
The Japanese yen JPY= slipped a fraction on the firmer
dollar to 104.85 per dollar and other Asian currencies also
traded a touch lower.
Hopes for a breakthrough in the trade-deal stalemate between
Britain and Europe held the pound steady above $1.30. GBP/
Over the weekend, Britain's Northern Island minister said
there was a good chance of a trade deal. WAVES AND CENBANKS
The week ahead holds three major central bank meetings and
the final sprint to the polls in the United States.
The Bank of Canada and Bank of Japan are expected to hold
fire for now, while the market assumes the European Central Bank
will sound cautious on inflation and growth, even if it skips a
further easing on Thursday.
"The risk is that ECB President Christine Lagarde strikes a
dovish tone during her post-meeting press conference," said
Commonwealth Bank of Australia currency analyst Joe Capurso.
"If President Lagarde emphasises the downside risks facing
the Eurozone economy, the counter-cyclical dollar can rise."
Analysts also reckon that a Joe Biden victory next week,
especially if the Democrats win control of the Senate, would
likely herald a large U.S. stimulus package. But investors are
treading carefully.
"I think that the dollar is now as polarised as it gets,"
said Diego Parrilla, chief investment officer of Quadriga Igneo,
a fund designed to profit in market turmoil.
"On the one hand, we have a very clear will from the Fed and
the U.S. government to print and borrow their way out of the
problem," he said, weakening the outlook for the dollar.
"But it's almost like the more consensus you get and the
bigger the position, you will see also big reversals, and my
personal view is that the dollar remains a good thing to own
during periods of stress."
Elsewhere, China's top leaders chart the country's economic
course for 2021-2025 at a key meeting starting on Monday, and
may adopt a lower or more flexible growth target. The yuan CNY= , which has soared more than 7% since May as
China has led the world's recovery from the COVID-19 pandemic,
edged lower with the broader mood to 6.6852 per dollar. CNY/
Later on Monday, investors are watching for a German
sentiment survey at 0900 GMT, following a robust Purchasing
Managers' Index figure last week, and U.S. housing data, due at
1400 GMT.
========================================================
Currency bid prices at 11:43AM (343 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1834 $1.1862 -0.24% +5.56% +1.1859 +1.1833
Dollar/Yen JPY=D3 104.8550 104.8000 +0.07% -3.44% +104.8850 +104.6750
Euro/Yen EURJPY= 124.08 124.19 -0.09% +1.75% +124.2200 +123.9800
Dollar/Swiss CHF=EBS 0.9051 0.9040 +0.13% -6.46% +0.9053 +0.9044
Sterling/Dollar GBP=D3 1.3026 1.3039 -0.10% -1.79% +1.3062 +1.3026
Dollar/Canadian CAD=D3 1.3154 1.3124 +0.21% +1.23% +1.3161 +1.3123
Aussie/Dollar AUD=D3 0.7115 0.7137 -0.29% +1.42% +0.7142 +0.7116
NZ NZD=D3 0.6682 0.6692 -0.13% -0.68% +0.6694 +0.6677
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX