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FOREX-Dollar drops as stocks surge, Fed meeting in focus

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

 (Adds quotes, updates prices)
    By Karen Brettell
    NEW YORK, Nov 5 (Reuters) - The U.S. dollar fell to 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 before the Federal Reserve will conclude its
two-day meeting.
    Democrat Joe Biden edged closer to victory over Republican
President Donald Trump in the U.S. presidential race as election
officials tallied votes in the handful of states that will
determine the outcome and protesters took to the streets.

    But the so called "blue wave," where Democrats also take
control of the Senate in congressional elections, looked
unlikely. Wall Street's main indexes jumped as investors bet
that a Republican-held Senate would block any moves by a Biden
administration to tighten regulation and raise taxes on
corporate America. 
    “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 0.74% against a basket of currencies
 to 92.71.
    The euro jumped 0.78% to $1.1813. The dollar dropped
0.78% against the Japanese yen to 103.67 yen, the lowest
since March 12, and breached technical support at 104 yen that
will now likely form resistance.
    The yuan 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 ultra-loose Federal Reserve
policy 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's policy-setting Federal Open Market
Committee is expected to stick closely to its last statement and
repeat its pledge to do whatever it can to help the economy
through the coronavirus-triggered recession when it concludes
its meeting on Thursday.
    U.S. Treasury yields fell from four-month highs this week as
the prospect of a large jump in stimulus on a Democrat sweep of
Congress faded, which is also expected to weigh on the dollar.
    “Regardless of the election result, I think the dollar’s
going to fall,” said Marc Chandler, chief market strategist at
Bannockburn Global Forex in New York.
    “Typically a country with a large budget deficit, a large
current account deficit, has to offer a large interest rate
premium to suck in world savings, and because we can’t, because
of the weak economy, the low inflation, I think that we can’t
offer a sufficiently high interest rate premium,” Chandler said.

        
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    Currency bid prices at 11:42AM (1642 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1813        $1.1722     +0.78%         +5.38%      +1.1859     +1.1712
 Dollar/Yen       JPY=        103.6700       104.4800    -0.78%         -4.77%      +104.5500   +103.6200
 Euro/Yen         EURJPY=     122.49         122.53      -0.03%         +0.43%      +123.1600   +122.2200
 Dollar/Swiss     CHF=        0.9054         0.9124      -0.77%         -6.45%      +0.9135     +0.9045
 Sterling/Dollar  GBP=        1.3108         1.2985      +0.95%         -1.14%      +1.3114     +1.2932
 Dollar/Canadian  CAD=        1.3047         1.3139      -0.70%         +0.47%      +1.3177     +1.3028
 Australian/Doll  AUD=        0.7264         0.7173      +1.27%         +3.46%      +0.7275     +0.7146
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0703         1.0690      +0.12%         -1.37%      +1.0726     +1.0687
 Euro/Sterling    EURGBP=     0.9011         0.9025      -0.16%         +6.59%      +0.9071     +0.9007
 NZ               NZD=        0.6758         0.6694      +0.96%         +0.33%      +0.6768     +0.6680
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.1842         9.3174      -1.43%         +4.62%      +9.3675     +9.1472
 Euro/Norway      EURNOK=     10.8518        10.9269     -0.69%         +10.31%     +10.9740    +10.8218
 Dollar/Sweden    SEK=        8.7108         8.7772      -0.04%         -6.84%      +8.8034     +8.6657
 Euro/Sweden      EURSEK=     10.2890        10.2928     -0.04%         -1.72%      +10.3180    +10.2680
 

 (Reporting by Karen Brettell; editing by Kirsten Donovan and
Jonathan Oatis)
  
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