By Chuck Mikolajczak

New York, Oct 12 (Reuters)The dollar index was little changed near three-week lows on Monday as optimism over the possibility of a COVID-19 relief bill was curbed by concern over the pandemic, while China’s yuan fell after the People’s Bank of China (PBOC) changed its reserve requirements policy.

On Sunday, the Trump administration called on Congress to pass a stripped-down coronavirus relief bill using leftover funds from an expired small-business loan program, as negotiations on a broader package continue to run into roadblocks. A White House spokeswoman said on Monday that Senate Republicans will go along with what Trump wants in legislation.

The greenback has held within a range of about 2% over the past three weeks as talks have gone back and forth. The dollar had its biggest loss in six weeks on Friday amid rising hopes a fiscal stimulus package would be agreed to stem the economic fallout from COVID-19. More stimulus is seen as negative for the dollar.

“The dollar just retains this soft underbelly on expectations that sooner or later there will be some stimulus out of Washington,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington DC.

“At the same time, if you look at some of the election developments, the polls are trending in a way that is reducing worries about a contested outcome, that is more risk positive and therefore dollar negative.”

Opinion polls show Biden with a substantial lead nationally, but the advantage is smaller in some of the states that may decide the election outcome.

The offshore yuan CNHUSD=R fell 0.76% against the dollar after China’s central bank said on Saturday it would lower the reserve requirement ratio for financial institutions when conducting some foreign exchange forwards trading, a move seen

NEW YORK (Reuters) – The dollar slipped against major currencies on Thursday in volatile trading, as hopes for U.S. fiscal stimulus cheered investors and spurred them to seek higher-yielding but riskier currencies.

FILE PHOTO: A U.S. Dollar banknote is seen in this illustration taken May 26, 2020. REUTERS/Dado Ruvic/Illustration

The Chinese yuan gained the most against the dollar, reaching a year-and-a-half high in the offshore market, as a holiday in China dried up liquidity, exaggerating the moves.

In addition, Chinese data on Wednesday showed its economic recovery was on track.

Commodity currencies such as the Australian, New Zealand, and Canadian dollars as well as the Norwegian crown also rose versus the greenback.

U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were expected to try again on Thursday to reach a deal on COVID-19 relief, while the House of Representatives stood ready for a second day to move a Democratic bill if talks fail.

Mnuchin raised hopes of an agreement by telling reporters that Wednesday’s discussions had made “a lot of progress in a lot of areas.”

“The market is latching on to renewed hopes for a stimulus deal,” said Erik Nelson, macro strategist, at Wells Fargo in New York. “Those stimulus hopes seem to be driving much of today’s macro price action.”

Wall Street shares were higher on the day, while U.S. Treasury prices were lower.

In mid-morning trading, the euro rose 0.1% against the dollar to $1.1721 EUR=EBS.

The Australian dollar rose 0.1% against the greenback to US$0.7168 AUD=D3. The New Zealand dollar gained 0.3% to US$0.6631 NZD=D3. Against the Canadian dollar, the U.S. dollar slipped 0.1% C$1.3314 CAD=D3.

The dollar index was little changed at 93.851 =USD, after earlier falling to 93.522, its weakest level since Sept. 22.

By Ahmad Ghaddar

LONDON (Reuters) – Oil prices fell on Thursday as rising coronavirus cases dampened the demand outlook, with further price pressure from a rise in OPEC output last month, though losses were capped by renewed hopes for U.S. fiscal stimulus.

Brent crude <LCOc1> futures fell 17, or 0.4%, to $42.13 a barrel by 0818 GMT and U.S. West Texas Intermediate (WTI) crude <CLc1> futures were down 22 cents, or 0.6%, at $40.

“It has become evident that the virus has not been contained. Infection rates are going up, the global death toll has surpassed the 1 million mark and the world is becoming a gloomy place once again,” said PVM Oil analyst Tamas Varga.

In the United States alone the pandemic has infected more than 7.2 million and killed more than 206,000.

Increasing oil supply from the Organization of the Petroleum Exporting Countries (OPEC) also weighed on the market, with output in September up 160,000 barrels per day (bpd) from August, a Reuters survey found.

The rise was largely on the back of higher supplies from Libya and Iran, both exempt from an oil supply pact between OPEC and allies led by Russia, a grouping known as OPEC+.

“Increasing supplies from OPEC+ will be risking the rebalancing effort as the market is still grappling with weak demand,” ANZ Research said.

Prices received some respite from progress in U.S. talks on a stimulus package for the world’s biggest economy.

U.S. President Donald Trump’s administration has proposed a new stimulus package worth more than $1.5 trillion.

U.S. Treasury Secretary Steven Mnuchin earlier said that talks with House Speaker Nancy Pelosi had made progress on COVID-19 relief legislation, and the House of Representatives postponed a vote on a $2.2 trillion Democratic coronavirus plan to allow more time to agree a bipartisan