* Implied volatility rises in yen, euro
* Yen rises to more than 1-month high vs dollar
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Olga Cotaga
LONDON, Oct 28 (Reuters) - The dollar rose against the euro
on prospects of a national coronavirus lockdown in France, with
implied volatility gauges in the common currency and the yen
hitting multi-month highs as traders positioned for next week's
U.S. election.
The dollar fell against the safe-haven Japanese currency, as
disappointment that the United States has not yet found a way to
push through another round of fiscal stimulus also weighed on
market sentiment.
President Emmanuel Macron will give a televised address on
Wednesday, amid media reports that the French government may
impose a lockdown from midnight on Thursday. With news that Pfizer has not yet been able to determine how
well its late-phase COVID-19 vaccine protects against the
disease adding to the cautious mood, riskier assets fell across
markets.
The euro was down 0.4% at $1.1753 EUR=EBS , while the yen
rose 0.2% to 104.16 per dollar JPY=EBS , its highest in more
than a month.
One-week implied volatility gauges in euro and yen rose to
their highest in nearly seven months. EUR1WO=R JPY1WO=R
That suggests investors are preparing for sharp price moves,
with the biggest focus on the United States as it struggles to
contain its coronavirus epidemic as people vote early in large
numbers for what promises to be a pivotal election on Nov. 3.
Markets are pricing a high probability of a clear victory by
presidential challenger Joe Biden, but some investors are
sceptical because the polls did not predict President Donald
Trump's win four years ago.
"This is why ... we have not seen the dollar strengthen as
much as a result... Investors don't want to go long the dollar
ahead of the (vote)," said Athanasios Vamvakidis, global head of
G10 FX strategy at Bank of America.
Legal battles between Republicans and Democrats over how to
count votes have also raised the risk that the outcome of the
election will be disputed. After the elections, the market's focus will again turn more
towards the sharp rise in coronavirus infections, Vamvakidis
added.
The dollar index - which tracks the currency against a
basket of six currencies - edged up 0.2% at 93.31 =USD .
The yuan was flat at 6.7171 in the offshore market
CNH=EBS , with one-week implied volatility in the Chinese
currency spiking to its highest since the beginning of 2016.
CNHSWO=