* Dollar, yen sold this week as stimulus hopes boost mood
* Yuan leaps as China returns; strong fix, Biden prospects
boost
* 10% gain in oil prices this week lifts oil exporters'
currencies
* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Oct 9 (Reuters) - The dollar drifted toward a
small weekly loss on Friday, while the Chinese yuan soared to a
17-month high, as investors wagered on a Joe Biden presidency
and on more U.S. stimulus spending.
The yuan's leap, when China's markets reopened after the
Mid-Autumn break, was partly a catch-up since the offshore yuan
has gained against a softening dollar during the week.
But as it extended gains beyond 1%, its biggest daily jump
in nearly two years, traders said it provided one of the
clearest indications yet that Biden's lead in the polls is
driving bets on a steadier Sino-U.S. relationship.
A stronger-than-expected setting of the yuan's trading band
also signalled that policymakers in China don't mind its rise.
The yuan was last up 1% at 6.7218 per dollar in
onshore trade and it rallied half a percent to 6.7083 per dollar
offshore. The dollar eased 0.1% against a basket of
currencies and it is down 0.4% for the week.
"I think the main message is that the (People's Bank of
China) is allowing further renminbi appreciation at this level,"
said Ken Cheung, chief Asian FX strategist at Mizuho Bank in
Hong Kong. "So markets are positioning for a renminbi rally."
The prospect of a Biden administration less inclined toward
tariffs and trade disputes was another boost, he added.
"Polls are showing that Biden is taking the lead... it means
the risks of resuming a new trade war are getting smaller, so I
think this is positive for the renminbi."
Reuters/IPSOS polling this week put Biden, a Democrat,
narrowly ahead of Republican President Donald Trump in five
states - Wisconsin, Pennsylvania, Michigan, Florida and Arizona
- that will play critical roles in deciding the victor.
STIMULUS HOPES
A growing expectation that, whoever wins, U.S. stimulus
spending will flow has also been weakening the dollar in the
short term, by improving investors' mood and their willingness
to buy riskier assets such as stocks and commodity currencies.
Talks have resumed between House Speaker Nancy Pelosi and
Treasury Secretary Steven Mnuchin over coronavirus aid plans,
two days after President Donald Trump ended them, and investors
reckon a Democratic administration would be eager to spend.
"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 rose 0.1% on
Friday to put it a fraction higher for the week, despite
analysts interpreting a Tuesday central bank statement as a
signal of monetary easing to come.
The New Zealand dollar likewise recouped Thursday
losses made after another dovish signal from the Reserve Bank of
New Zealand and was last up 0.3% at $0.6602.
The safe-haven Japanese yen, which has been sold with
the upbeat mood, was a tiny bit higher at 105.87 per dollar on
Friday. It is down about 0.5% this week.
The euro was up 0.1% to $1.1773 and sterling
crept higher to $1.2951 and has held firm this week as prospects
for a Brexit deal have appeared to improve.
Elsewhere, a 10% surge in oil prices this week, on optimism
about stimulus and supply disruptions owing to a storm in the
Gulf of Mexico and strike in Norway, has boosted oil-linked
currencies.
The Canadian dollar is set for its best weekly rise
in more than two months, adding 0.9% to C$1.3185 per dollar. The
Russian rouble has also gained about 1% for the week.
========================================================
Currency bid prices at 10:55AM (255 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar !RIC !RIC !RIC !RIC !RIC !RIC
{EUR=EBS} is {EUR=EBS} {EUR=EBS} is {EUR=EBS} {EUR=EBS} {EUR=EBS}
invalid is invalid invalid% is is invalid is invalid
invalid%
Dollar/Yen 105.8250 106.0300 -0.17% -2.54% +106.0270 +105.8300
Euro/Yen 124.64 124.69 -0.04% +2.21% +124.7600 +124.5300
Dollar/Swiss !RIC !RIC !RIC !RIC !RIC !RIC
{CHF=EBS} is {CHF=EBS} {CHF=EBS} is {CHF=EBS} {CHF=EBS} {CHF=EBS}
invalid is invalid invalid% is is invalid is invalid
invalid%
Sterling/Dollar 1.2953 1.2933 +0.15% -2.34% +1.2954 +1.2930
Dollar/Canadian 1.3185 1.3197 -0.08% +1.51% +1.3197 +1.3180
Aussie/Dollar 0.7181 0.7168 +0.20% +2.36% +0.7183 +0.7168
NZ 0.6606 0.6582 +0.38% -1.81% +0.6607 +0.6584
Dollar/Dollar All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ 124.64
(Reporting by Tom Westbrook; editing by Richard Pullin and
Gerry Doyle)
https://www.reuters.com/article/global-forex/forex-dollar-slips-and-yuan-soars-as-investors-eye-biden-presidency-idUSL4N2H00PA
2020-10-09 02:57:00Z
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