FOREX-Dollar dips as investors bet on Biden victory

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

(Adds details, updates prices; previous LONDON)
By Karen Brettell
NEW YORK, Nov 3 (Reuters) - The U.S. dollar dipped on
Tuesday as risk appetite grew on bets that Democrat Joe Biden
will win Tuesday’s U.S. presidential election and launch a large
new stimulus package, and as the greenback faced resistance at
the top of its recent range.
Biden has led in national polls but President Donald Trump
is close in enough swing states to possibly piece together the
270 state-by-state Electoral College votes needed to hold on to
the presidency, which he won in a surprise 2016 election result.

Analysts believe a Biden win would weaken the dollar as the
former vice-president is expected to spend big on stimulus and
to take a freer approach to trade, boosting other currencies at
the dollar's expense. Fiscal spending would likely be even
higher if Democrats also take control of the U.S. Senate.
“It appears that markets are pricing in solid odds of a Blue
Wave today, implying significant fiscal stimulus and debt
issuance seen in 2021,” Win Thin, global head of currency
strategy at Brown Brothers Harriman, said in a report.
The dollar index against a basket of currencies fell
0.55% to 93.52.
The euro jumped 0.61% to $1.1711, after hitting
technical support at $1.1621 on Monday, which was a one-month
low.
The dollar fell 0.12% against the yen to 104.58 yen.
The greenback was boosted last week on concerns that the
election result may not be clear for days or even weeks due to a
large increase in mail-in ballots and on possible legal
challenges.
Rather than outright bets on a particular outcome, many
traders have also flocked to the safety of dollars so that they
are well positioned to take advantage of volatility when results
arrive.
"Those who haven't hedged yet, but who would feel the pain
in case of strong moves, should hedge themselves as soon as
possible, as it is getting increasingly expensive," Commerzbank
strategist Antje Praefcke wrote to her clients in a note.
Overnight gauges of volatility for major currency pairs
jumped to multi-month highs ahead of the outcome of the
election.
Euro/dollar implied volatility surged to 19%,
its highest level since the depths of the market mayhem in
March, compared with less than 7% on Monday.
Higher risk currencies including the Australian dollar
outperformed with the Aussie rising 1.23% to $0.7140, even after
Australia's central bank trimmed interest rates to near zero and
ramped up its bond-buying plans.
The Federal Reserve will conclude its two-day meeting on
Wednesday. U.S. Jobs data for October is also in focus on
Friday.

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Currency bid prices at 9:25AM (1425 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1711 $1.1640 +0.61% +4.47% +1.1718 +1.1635
Dollar/Yen JPY= 104.5800 104.7100 -0.12% -3.93% +104.8000 +104.4900
Euro/Yen EURJPY= 122.48 121.93 +0.45% +0.43% +122.7500 +121.8300
Dollar/Swiss CHF= 0.9144 0.9187 -0.47% -5.52% +0.9192 +0.9142
Sterling/Dollar GBP= 1.3005 1.2912 +0.72% -1.92% +1.3011 +1.2905
Dollar/Canadian CAD= 1.3134 1.3215 -0.61% +1.14% +1.3234 +1.3131
Australian/Doll AUD= 0.7140 0.7053 +1.23% +1.69% +0.7143 +0.7029
ar
Euro/Swiss EURCHF= 1.0711 1.0695 +0.15% -1.30% +1.0718 +1.0693
Euro/Sterling EURGBP= 0.9003 0.9012 -0.10% +6.49% +0.9023 +0.8998
NZ NZD= 0.6680 0.6631 +0.74% -0.83% +0.6683 +0.6613
Dollar/Dollar
Dollar/Norway NOK= 9.3625 9.5569 -2.03% +6.65% +9.5789 +9.3670
Euro/Norway EURNOK= 10.9655 11.1240 -1.42% +11.46% +11.1618 +10.9695
Dollar/Sweden SEK= 8.8620 8.9030 +0.12% -5.19% +8.9143 +8.8601
Euro/Sweden EURSEK= 10.3793 10.3669 +0.12% -0.86% +10.3980 +10.3618





(Additional reporting by Julien Ponthus in London; Editing by
Nick Macfie)