NEW YORK (Reuters) – The dollar fell to three-week lows on Friday on optimism that a deal for new U.S. stimulus would be reached, and as investors bet that Democrat Joe Biden is more likely to win the U.S. presidency and offer a larger economic package.

U.S. House Speaker Nancy Pelosi said she would resume talks on a possible COVID-19 stimulus package with Treasury Secretary Steven Mnuchin on Friday, while Senate Republicans voiced doubts that a deal can be reached before the Nov. 3 election.

Republican President Donald Trump, who initially withdrew from the negotiations this week only to regain interest in forging a bipartisan accord, said he was open to a larger deal.

“It seems like, at least in the White House, there is more of a sense of urgency that it needs to be done,” said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto. However, “the key question for us is whether or not the Senate Republicans are going to go with it … they don’t seem to be united.”

“I think we’re more or less in a standstill until we get some more clarity on whether or not this stimulus package is going to go through,” Rai said.

The dollar index against a basket of major currencies <=USD> fell 0.54% to 93.05, the lowest since September 21, and fell below its 50-day moving average for the first time since then. It has held within a range from 91.74 to 94.75 since late July.

The euro

rose 0.57% to $1.1825. The greenback weakened 0.39% against the Japanese yen

to 105.60 yen.
=>
=>

The U.S. currency also fell on rising expectations that Biden will win the Nov. 3 election, and that Democrats could win the Senate. A Democratic victory would likely result

By Hideyuki Sano

TOKYO, Oct 9 (Reuters)Asian shares inched towards 2-1/2-year highs on Friday as revived hopes for a U.S. stimulus deal eclipsed weaker-than-expected jobs data, while mainland Chinese markets jumped after a week-long holiday.

Investors were also increasingly expecting the Democrats to take back the White House, and possibly the Senate as well, in the Nov. 3 U.S. election, analysts said.

A widening lead for Democratic presidential candidate Joe Biden is seen as reducing the risk of a contested election and opening the way for a big economic stimulus, helping to counter investors’ wariness about a Democrat pledge to hike corporate tax rates.

European shares are expected to open higher with Euro Stoxx50 futures STXEc1 rising 0.1% in early trade.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.34%, inching closer to its Aug. 31 peak, which was its highest level since March 2018. China’s CSI300 index .CSI300 gained 3.17% after the Golden Week holidays.

Futures for the S&P 500 EScv1 gained 0.39% but Japan’s Nikkei .N225 bucked the trend to fall 0.12% after hitting a 7 1/2-month high.

“Markets are starting to assume a Biden victory,” said Osamu Takashima, chief FX strategist at Citigroup Global Markets Japan.

U.S. President Donald Trump on Thursday said talks with Congress had restarted on targeted fiscal relief, after calling off negotiations earlier this week.

House of Representatives Speaker Nancy Pelosi expressed confidence about reaching an agreement on the amount of aid in new legislation.

On Wall Street, the S&P 500 .SPX gained 0.80% and the Nasdaq Composite .IXIC added 0.5%.

The S&P 500 energy index .SPNY led sector percentage gains, rising 3.8% on the day, after a jump in oil prices due to production shutdowns ahead of a storm in the U.S. Gulf of Mexico and the

NEW YORK (Reuters) – Investors on Wall Street can add another layer of uncertainty to a market already unnerved by last month’s sell-off, stalled fiscal stimulus and President Donald Trump’s COVID-19 diagnosis, which weighed on stocks on Friday.

FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City, New York, U.S., March 9, 2020. REUTERS/Carlo Allegri/File Photo

A higher capital gains tax that could accompany a win by Democratic presidential nominee Joe Biden is also emerging as a potential counterweight to this year’s powerful rally in stocks.

Biden has proposed here taxing capital gains and dividends as ordinary income, which would increase the tax rate from 20% to 39.6% for individuals and couples earning over $1 million, the highest tax bracket.

That policy – which would likely be easier to enact if Democrats also win the Senate and retain control of the House – may push some investors to lock in gains ahead of December if Biden emerges the winner in the Nov. 3 vote, fund managers said.

Tax-motivated selling would likely be most pronounced in technology and other momentum stocks and could push the broad S&P 500 index lower between November and the end of the year, said Eddie Perkin, chief equity investment officer at Eaton Vance.

“If you have enough people looking to harvest gains, that has an impact on the stocks that have led the market, and the big tech stocks could be where people choose to sell at the end of the year,” he said.

On Friday, President Trump’s COVID-19 diagnosis triggered a sell-off in stocks and oil as investors moved away from risk assets. But many tech and momentum stocks are sporting healthy gains for the year despite a sell-off that pushed

By David Randall

NEW YORK, Oct 2 (Reuters)Investors on Wall Street can add another layer of uncertainty to a market already unnerved by last month’s sell-off, stalled fiscal stimulus, and by President Donald Trump’s COVID-19 diagnosis, which weighed on stocks on Friday.

A higher capital gains tax that could accompany a win by Democratic presidential nominee Joe Biden is also emerging as a potential counterweight to this year’s powerful rally in stocks.

Biden has proposed taxing capital gains and dividends as ordinary income, which would increase the tax rate from 20% to 39.6% for individuals and couples earning over $1 million, the highest tax bracket.

That policy – which would likely be easier to enact if Democrats also win the Senate and retain control of the House – may push some investors to lock in gains ahead of December if Biden emerges the winner in the Nov. 3 vote, fund managers said.

Tax-motivated selling would likely be most pronounced in technology and other momentum stocks and could push the broad S&P 500 index lower between November and the end of the year, said Eddie Perkin, chief equity investment officer at Eaton Vance.

“If you have enough people looking to harvest gains, that has an impact on the stocks that have led the market, and the big tech stocks could be where people choose to sell at the end of the year,” he said.

On Friday, President Trump’s COVID-19 diagnosis triggered a sell-off in stocks and oil as investors moved away from risk assets. But many tech and momentum stocks are sporting healthy gains for the year despite a sell-off that pushed the S&P 500 down 3.9% in September, its first monthly loss since March.

Tesla Inc TSLA.O, for instance, is up 423% for the year through