FOREX-Dollar in narrow range ahead of U.S. election, pound weakens

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

By Eimi Yamamitsu
TOKYO, Nov 2 (Reuters) - The U.S. dollar steadied on Monday
as investors prepared for U.S. presidential elections on
Tuesday, while a surge in global coronavirus cases continued to
weigh on sentiment.
The greenback held onto gains after posting its largest
weekly percentage rise since late September in the previous
trading session.
The pound inched lower on cornavirus worries, after British
Prime Minister Boris Johnson announced over the weekend a
one-month lockdown across England. Investors are sticking to the U.S. currency, which is often
considered to be safe, 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 94.17 =USD , near its
one-month high of 94.195.
Meanwhile, the novel coronavirus continues to ravage
already-battered economies.
England's lockdown aimed to last until Dec. 2 could be
extended as Britain struggles to contain a second wave of
COVID-19, a senior cabinet member said on Sunday. The United
Kingdom is grappling with more than 20,000 new coronavirus cases
a day. Against the dollar, the pound was last down 0.39% to $1.2904
GBP=D3 , with traders also eyeing 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 Europe, new COVID-19 cases have doubled in five weeks, a
Reuters tally showed, with total infections surpassing 10
million. The euro steadied in Asian trade but was close to hitting
long-term lows against the greenback and Japanese yen.
It last fetched $1.1638 EUR=EBS , extending losses after a
near one-month low of $1.1640 against the U.S. dollar seen last
week, while against the yen, the common currency changed hands
at 121.83 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.
Indeed, the United States posted nearly 87,000 cases on
Saturday and record hospitalisations in Midwestern states.
The risk-sensitive Australian dollar AUD=D3 also took a
hit from global coronavirus concerns, last trading at $0.6999
after slipping to its lowest since July at $0.6997.
The greenback was little changed against the yen at 104.72
yen JPY=EBS , away from a five-week trough of 104.02 hit on
Thursday.
"Dollar/yen will likely remain quiet for today and tomorrow,
due to the election," Daiwa Securities chief FX strategist
Mitsuo Imaizumi said, but added any dispute over vote count
could lead to volatility.
Chinese yuan last sat at 6.6883 per dollar CNY= , as
China's factory activity data, both private and official, were
above analysts' expectations. Besides the U.S. presidential election, this week is filled
with economic data, including PMI data from the United States,
euro zone 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.