* Yen hits three-week low
* Kiwi slips as RBNZ again mentions negative rates
* Fed speakers eyed after easing hints in minutes
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Ritvik Carvalho
LONDON, Oct 8 (Reuters) - The dollar and safe-haven Japanese
yen nursed losses on Thursday, after revived hopes for U.S.
fiscal stimulus improved investor sentiment, while the prospect
of negative interest rates knocked the New Zealand dollar lower.
President Donald Trump and House Speaker Nancy Pelosi seem
open to pursuing a stimulus package for the airline industry,
even though Trump halted talks with Democrats for a bigger plan.
Investors also expect Joe Biden, if elected, would quickly
spend money to stimulate growth.
That mood has lifted equity markets and sunk the yen JPY=
to a three-week low of 106.11. The dollar struggled to recoup
losses against other majors, excluding the kiwi.
Against a basket of currencies, the dollar was down 0.1% on
the day. =USD
The euro EUR= edged up to $1.1782. The risk-sensitive
Australian dollar AUD=D3 rose 0.3% to $0.7163. AUD/
"Overall, investors seem to be focusing more on the
increasing odds of a Biden win and what that might imply for a
stimulus package after the election," said Marshall Gittler,
head of investment research at BDSwiss.
"With that eventuality in mind, Trump's decision to stop
negotiations now is ultimately a risk-on move, as it increases
the likelihood of a decisive Biden win."
The New Zealand dollar NZD= was the biggest loser among
G10 currencies, dropping as much as half a percent after central
bank officials again hinted that negative interest rates are
possible. It recovered in early deals in London to trade 0.1%
higher to the dollar on the day. Money-market pricing of an April 2021 rate cut increased
after the remarks and the kiwi slipped to a three-week low
against the Aussie AUDNZD= , before paring losses a little. It
was last down 0.2% against the dollar at $0.6570.
"Today's rhetoric from the RBNZ leaves us of the view it
will cut the official cash rate into negative territory before
too much longer," BNZ economist Craig Ebert said in a note,
forecasting rates at -0.50% later in 2021, from 0.25% currently.
FED SPEAKERS ON RADAR
Minutes of the U.S. Federal Reserve's September meeting,
released on Wednesday, hinted at more easing. Many participants
had assumed the economy would be supported by fiscal spending,
and some were open to further debate about the Fed's bon- buying
programme. "This nuance did not come across in Powell's post-meeting
press conference nor in recent speeches," National Australia
Bank economist Tapas Strickland said in a note on Thursday.
"In that vein it is worth noting that the Fed's (Loretta)
Mester on Monday said she might support shifting asset purchases
to more longer-dated bonds."
It has also focused investor attention on speeches from Fed
members Eric Rosengren and Raphael Bostic, at 1610 GMT and 1800
GMT respectively, for any further hints at the Fed's thinking.
Elsewhere, the U.S. vice presidential debate reinforced
investor expectations on the likely policies of a Trump or Biden
administration. "Pence reiterated his hardline stance against China ...
meanwhile, Senator Kamala Harris said Trump lost the trade war
with China," said Mizuho's chief Asia FX strategist Ken Cheung.
"That says Biden's victory should mitigate the risk of
resuming the trade war, which could prompt the People's Bank of
China to allow yuan depreciation again to counter the tariffs
impact," he said.
He expects the onshore yuan to be fixed around 6.79 per
dollar when trading resumes after a week-long holiday in China
on Friday - more or less steady despite a weaker dollar.
The yuan last traded at 6.7898 onshore CNY= and is at
6.7389 in offshore trade CNH= .
Sterling GBP= traded 0.3% higher at $1.2945.
Bank of England Governor Andrew Bailey said he believed
Britain and the European Union should be able to reach a trade
deal, and that he did not expect the new wave of coronavirus
cases to be as damaging as the first.