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FOREX-Dollar drops as stocks surge, Fed keeps policy unchanged

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

 (Adds Fed statement, quote, updates prices)
    By Karen Brettell
    NEW YORK, Nov 5 (Reuters) - The U.S. dollar fell to a
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 as the Federal Reserve kept its
loose monetary policy intact.
    Stocks jumped as bets on Republicans retaining control of
the Senate eased worries of major policy changes that could hurt
corporate America under a Joe Biden White House, even as the
presidential election hung in the balance.
    Democrat Biden on Thursday inched nearer to victory over
President Donald Trump in an exceedingly close U.S. election
that hinged on razor-thin margins, while the Republican
president launched a flurry of lawsuits hoping to slow down his
opponent.
    But the so called "blue wave," where Democrats also take
control of the Senate in congressional elections, looked
unlikely.
    “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 0.95% against a basket of currencies
 to 92.51.
    The euro jumped 0.99% to $1.1838. The dollar dropped
0.95% against the Japanese yen to 103.49 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 the Fed's zero rate policy and
ongoing bond purchases 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 on Thursday pledged again to do
whatever it can in coming months to sustain a U.S. economic
recovery.
    It was "virtually unchanged from the previous meeting’s
message," said Lou Brien, a market strategist at DRW Trading in
Chicago.
    Some analysts say the Fed may need to act further to boost
the economy if there is no large fiscal spending, though others
note that it is running out of tools.
    If Treasury yields rise meaningfully the Fed is expected to
shift more of its bond purchases to longer-dated debt to keep
the rates low.

    ========================================================
    Currency bid prices at 3:00PM (2000 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1838        $1.1722     +0.99%         +5.60%      +1.1859     +1.1712
 Dollar/Yen       JPY=        103.4900       104.4800    -0.95%         -4.93%      +104.5500   +103.4900
 Euro/Yen         EURJPY=     122.51         122.53      -0.02%         +0.46%      +123.1600   +122.2200
 Dollar/Swiss     CHF=        0.9039         0.9124      -0.93%         -6.56%      +0.9135     +0.9044
 Sterling/Dollar  GBP=        1.3143         1.2985      +1.22%         -0.88%      +1.3146     +1.2932
 Dollar/Canadian  CAD=        1.3035         1.3139      -0.79%         +0.41%      +1.3177     +1.3028
 Australian/Doll  AUD=        0.7283         0.7173      +1.53%         +3.73%      +0.7289     +0.7146
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0705         1.0690      +0.14%         -1.35%      +1.0726     +1.0687
 Euro/Sterling    EURGBP=     0.9005         0.9025      -0.22%         +6.52%      +0.9071     +0.8997
 NZ               NZD=        0.6771         0.6694      +1.15%         +0.52%      +0.6777     +0.6680
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        9.1703         9.3174      -1.58%         +4.46%      +9.3675     +9.1472
 Euro/Norway      EURNOK=     10.8578        10.9269     -0.63%         +10.37%     +10.9740    +10.8218
 Dollar/Sweden    SEK=        8.6972         8.7772      +0.01%         -6.96%      +8.8034     +8.6657
 Euro/Sweden      EURSEK=     10.2940        10.2928     +0.01%         -1.67%      +10.3180    +10.2680
 
    

 (Reporting by Karen Brettell; editing by Jonathan Oatis and
Chizu Nomiyama)
  
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