FOREX-Dollar gains as bets on big fiscal spending unwound

    * Graphic: World FX rates in 2020

 (Adds quote, updates prices)
    By Karen Brettell
    NEW YORK, Nov 4 (Reuters) - The U.S. dollar gained against a
basket of currencies on Wednesday after Democrats looked
unlikely to take control of the U.S. Senate as a result of
Tuesday’s U.S. presidential election, leading investors to
unwind bets that a large fiscal package is likely.
    President Donald Trump and Democratic challenger Joe Biden
on Wednesday each faced narrow paths to potential victory in a
close-fought presidential election that will be determined by a
razor-thin margin.
    A so-called “blue wave” of votes for Democrats did not
emerge as many had expected, making it likely that Republicans
will maintain control of the U.S. Senate, and oppose any massive
increase in stimulus spending.
    “What’s tough is you can’t even say for sure what the
results are going to be, but a split Congress is likely,” said
Edward Moya, senior market analyst at OANDA in New York.
    “You’re probably going to see that the dollar decline will
still take place, it just won’t be as accelerated as with what
would have happened with a blue wave,” Moya said.
    The dollar index rose 0.31% to 93.42, after reaching
a one-month high of 94.31 in overnight trading. 
    The euro gained 0.08% to $1.1720, after earlier
dropping to $1.1602, its lowest since July 24.
    The greenback was unchanged against the Japanese yen at
104.46 yen.
    Despite uncertainty over the U.S. election result, risk
appetite remained solid with stocks rising, which likely limited
the strength of Wednesday’s dollar rally.
    "We have not so far seen big risk-off moves so I would think
that probably that’s the template for how things will evolve
here," said Jonathan Davies, head of currency strategy at UBS.
    "So even if we’re getting more indications that it’s going
to be drawn out, the experience so far is not suggesting that
we’re going to see huge FX volatility and huge dollar strength,"
he added.
    Overnight volatility gauges for euro-dollar and dollar-yen
fell, after hitting their highest levels since March earlier
this week,.
   The prospect of legal challenges over the election result may
still dampen risk taking in the coming days or weeks, which
would likely lift the greenback.
    "The contested election outcome and this going to the
courts, that is what I think everyone does not want," said Moya.
 "If you don’t have that certainty then you’re going to
eventually see that risk aversion will persist like we saw in
    Currency bid prices at 12:05PM (1705 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1720        $1.1711     +0.08%         +4.55%      +1.1768     +1.1605
 Dollar/Yen       JPY=        104.4600       104.4600    +0.00%         -4.04%      +105.3400   +104.1600
 Euro/Yen         EURJPY=     122.45         122.46      -0.01%         +0.41%      +123.0700   +121.9800
 Dollar/Swiss     CHF=        0.9111         0.9117      -0.07%         -5.86%      +0.9198     +0.9093
 Sterling/Dollar  GBP=        1.3001         1.3058      -0.44%         -1.95%      +1.3139     +1.2916
 Dollar/Canadian  CAD=        1.3119         1.3130      -0.08%         +1.02%      +1.3299     +1.3095
 Australian/Doll  AUD=        0.7183         0.7160      +0.32%         +2.29%      +0.7221     +0.7050
 Euro/Swiss       EURCHF=     1.0684         1.0687      -0.03%         -1.55%      +1.0714     +1.0662
 Euro/Sterling    EURGBP=     0.9011         0.8970      +0.46%         +6.59%      +0.9032     +0.8947
 NZ               NZD=        0.6691         0.6698      -0.10%         -0.67%      +0.6742     +0.6617
 Dollar/Norway    NOK=        9.3025         9.3625      -0.64%         +5.91%      +9.5928     +9.2903
 Euro/Norway      EURNOK=     10.9035        10.9950     -0.83%         +10.83%     +11.1420    +10.8946
 Dollar/Sweden    SEK=        8.7850         8.8210      -0.49%         -6.02%      +8.9466     +8.7707
 Euro/Sweden      EURSEK=     10.2968        10.3472     -0.49%         -1.65%      +10.3885    +10.2879

 (Additional reporting by Elizabeth Howcroft in London; Editing
by Marguerita Choy)