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

By Tom Westbrook

SINGAPORE, Oct 9 (Reuters)The dollar drifted toward a second consecutive weekly loss on Friday, as higher commodity prices and persistent hopes for U.S. stimulus supported investor sentiment and riskier currencies.

Talks have resumed between U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin over coronavirus aid plans, two days after President Donald Trump ended them.

Limited progress kept dollar losses and other majors’ gains modest overnight, but the dollar eased 0.06% against a basket of currencies =USD and it is down 0.3% for the week.

The prospect of stimulus to support recovery in the world’s biggest economy has weighed on the dollar in the short-term by improving investors’ mood and their willingness to buy riskier assets such as stocks and commodity currencies.

Investors are also regarding improving chances of a Joe Biden presidency as increasing the likelihood of stimulus, since Democrats are pressing for the largest spending package.

“Market participants are travelling with the idea that a new round of U.S. fiscal stimulus is coming regardless, the uncertainty is more around whether it will happen before the election and how big it will be,” said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney.

“Investor confidence is growing that Biden will win the Presidential election by a clear margin, reducing the risk that Trump disputes the result.”

The risk-sensitive Australian dollar AUD=D3 rose 0.4% overnight and was steady early in the Asia session on Friday. It is flat for the week, despite analysts interpreting a Tuesday central bank statement as a signal of monetary easing to come.

The New Zealand dollar NZD=D3 has mostly recouped Thursday losses made after another dovish signal from the Reserve Bank of New Zealand and was steady at $0.6586 on Friday.

The safe-haven Japanese yen JPY=

By Ritvik Carvalho

LONDON, Oct 8 (Reuters)The dollar and safe-haven Japanese yen nursed losses on Thursday, after revived hopes for U.S. fiscal stimulus improved investor sentiment, while the prospect of negative interest rates knocked the New Zealand dollar lower.

President Donald Trump and House Speaker Nancy Pelosi seem open to pursuing a stimulus package for the airline industry, even though Trump halted talks with Democrats for a bigger plan.

Investors also expect Joe Biden, if elected, would quickly spend money to stimulate growth.

That mood has lifted equity markets and sunk the yen JPY= to a three-week low of 106.11. The dollar struggled to recoup losses against other majors, excluding the kiwi.

Against a basket of currencies, the dollar was down 0.1% on the day. =USD

The euro EUR= edged up to $1.1782. The risk-sensitive Australian dollar AUD=D3 rose 0.3% to $0.7163. AUD/

“Overall, investors seem to be focusing more on the increasing odds of a Biden win and what that might imply for a stimulus package after the election,” said Marshall Gittler, head of investment research at BDSwiss.

“With that eventuality in mind, Trump’s decision to stop negotiations now is ultimately a risk-on move, as it increases the likelihood of a decisive Biden win.”

The New Zealand dollar NZD= was the biggest loser among G10 currencies, dropping as much as half a percent after central bank officials again hinted that negative interest rates are possible. It recovered in early deals in London to trade 0.1% higher to the dollar on the day.

Money-market pricing of an April 2021 rate cut increased after the remarks and the kiwi slipped to a three-week low against the Aussie AUDNZD=, before paring losses a little. It was last down 0.2% against the dollar at $0.6570.

“Today’s rhetoric from the

By Tom Westbrook

SINGAPORE, Oct 8 (Reuters)The safe-haven dollar and yen nursed losses on Thursday, after the revival of hopes for some U.S. spending improved investor sentiment and appetite for riskier currencies.

A flurry of late-Tuesday tweets from President Donald Trump, after he cancelled talks with Democrats over coronavirus relief, suggested he was open to piecemeal spending measures.

That lifted equity markets and commodity currencies and sank the safe-haven yen JPY= to a three-week low of 106.11 per dollar overnight. The dollar was weaker on most other majors.

The euro EUR= edged up 0.2% to $1.1767 and held there early in the Asia session. The risk-sensitive Australian dollar AUD=D3 lifted off a one-week low and rose about 0.5% overnight to hold at $0.7137 in Asia. AUD/

With no fresh clues on stimulus, morning moves were slight and leaned in favour of the greenback. The New Zealand dollar NZD=D3 slipped 0.4% after a central bank official said the bank was “actively working” on negative rates.

Top White House officials have played down the likelihood that anything gets passed, but House Speaker Nancy Pelosi is pursuing a standalone bill for aid to airlines.

“It looks like they still can’t agree on a bigger package,” said Commonwealth Bank of Australia currency analyst Joe Capurso. “If they could get an agreement on that, you’d get a bit more of a reaction and the U.S. dollar would fall.”

The overnight mood had been further supported by hints at even more easing from the U.S. Federal Reserve in the minutes of its September meeting.

Many participants had assumed the economy would be supported by fiscal spending, and some are open to further debate about the Fed’s bond buying programme.

“This nuance did not come across in Powell’s post-meeting press conference nor in recent

By Julien Ponthus

LONDON, Oct 7 (Reuters)The dollar steadied on Wednesday, ticking down against most currencies after an initial jump triggered by U.S. President Donald Trump cancelling stimulus talks with Democrat lawmakers, a move which increased demand for safe-haven assets.

Trump’s surprise decision to call off stimulus talks until after the Nov. 3 presidential election initiated a selling spree on Wall Street with investors bracing for fresh downside risks for an already shaky U.S. economy.

The initial shock from the announcement eased when the U.S. President later asked Congress to extend $25 billion in new payroll assistance to U.S. passenger airlines.

Sentiment improved overnight in Asia where markets hit a two-week high and U.S. stock futures made their way back to positive territory.

All in all, analysts said the renewed uncertainty over stimulus would encourage investors to trade riskier currencies cautiously.

“This is set to reinstate caution in markets about the prospects of near-term economic recovery, helping the safe haven dollar and keeping cyclical FX soft”, ING strategists wrote in a morning note.

In early trading in Europe, the dollar was last quoted at $1.1754 per euro EUR=D3, down 0.18% after a 0.4% gain against the common currency during the previous session.

The British pound GBP=D3 was quoted at $1.2915, up 0.36% after losing 0.86% on Tuesday.

The Australian dollar AUD=D3 edged up 0.57% to $0.7142 after tumbling by more than 1.1% on Tuesday.

Traders say the Aussie faces more downside risks due to expectations that the Reserve Bank of Australia’s next move is to cut rates and buy more government debt.

The increased risk aversion, however, did not move the dollar much against the yen, which was last quoted at 105.75 JPY=D3, because both currencies tend to be bought during times of uncertainty, analysts