FOREX-Dollar slumps to two-month low, investors see more declines

    * Dollar falls broadly
    * Currencies price in low chance of big U.S. stimulus
    * Graphic: World FX rates in 2020

 (Adds comments on jobs report, updates prices; previous LONDON)
    By David Henry
    NEW YORK, Nov 6 (Reuters) - The dollar sank to its lowest
level in over two months against a basket of peer currencies on
Friday, as vote counting for the contentious U.S. elections
slowly moved toward a divided government and investors predicted
more losses for the currency.
    Investors are betting that Democrat Joe Biden will become
the next president but Republicans will retain control of the
Senate, which will make it difficult for the Democrats to pass
the larger coronavirus relief package they have been pushing.
    The need for more stimulus was underlined on Friday when the
U.S. government reported that employers hired the fewest workers
in five months in October. It was the clearest evidence yet that
the end of previous fiscal stimulus and exploding new
coronavirus infections were sapping momentum from the economic
    "We're still left with the view that the U.S. economy is
decelerating, and that's playing out in a markedly weaker
dollar," said Joe Manimbo, senior market analyst at Western
Union Business Solutions.
    Biden maintains an edge over Republican President Donald
Trump, but a few important states are still counting votes and
Trump is mounting legal challenges to ballot counts, so there is
still a high degree of uncertainty.
    The surge of new coronavirus cases to record levels in
several U.S. states could also curb economic activity.

    The dollar index fell against a basket of six major
currencies to 92.461, hitting its lowest level since Sept. 2.
    For the week, the dollar index was down as much as 1.7%, on
course for its biggest drop in almost four months.  
    A large decline in long-term Treasury yields due to
expectations for less fiscal stimulus, combined with a rally in
equities and other riskier assets, has placed the dollar under
consistent selling pressure that is likely to continue.
    "So far investors have been prepared to overlook the threat
of a contested election, presumably seeing Donald Trump’s legal
initiatives as 'frivolous' and these benign conditions have
generated a broad-based dollar decline," said strategists at
    The dollar fell further against the Japanese yen, trading at
103.58 yen on Friday, close to an eight-month low.
    Japanese Prime Minister Yoshihide Suga has vowed to work
closely with overseas authorities to keep currency moves stable,
because a strong yen is widely viewed as a threat to Japan's
    The recent currency moves have been big enough to set up a
brief reversal. "We could see some end-of-week profit-taking
catch up with the euro and the yen," Western Union Business
Solutions' Manimbo said. "But it looks like there's the
potential for dollar sentiment to continue to erode in the weeks
    The onshore yuan fell to 6.618 per dollar but
still remained close to its more than two-year high reached on
    Many investors expect a Biden administration would slightly
scale back Trump's trade war with China, which should benefit
the yuan.
    Against a buoyant euro, the dollar traded at
$1.1858 after falling 0.87% in the previous session.
    The single currency has risen sharply this week on the
dollar's weakness, but has also benefited from news of the
European Union inching closer to a budget deal.
    Currency bid prices at 9:57AM (1457 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar                  $1.1858        $1.1828     +0.26%         +5.78%      +1.1891     +1.1796
 Dollar/Yen                   103.5850       103.5500    +0.08%         -4.59%      +103.7500   +103.1950
 Euro/Yen                     122.82         122.40      +0.34%         +0.71%      +122.9300   +122.2300
 Dollar/Swiss                 0.9017         0.9042      -0.27%         -6.81%      +0.9056     +0.8985
 Sterling/Dollar              1.3108         1.3153      -0.33%         -1.15%      +1.3156     +1.3094
 Dollar/Canadian              1.3067         1.3046      +0.17%         +0.59%      +1.3096     +1.3038
 Aussie/Dollar                0.7246         0.7285      -0.52%         +3.29%      +0.7287     +0.7239
 Euro/Swiss                   1.0690         1.0694      -0.04%         -1.49%      +1.0703     +1.0676
 Euro/Sterling                0.9046         0.8991      +0.61%         +6.98%      +0.9055     +0.8990
 NZ                           0.6765         0.6774      -0.15%         +0.52%      +0.6801     +0.6756
 Dollar/Norway                9.1855         9.1700      +0.23%         +4.78%      +9.2395     +9.1425
 Euro/Norway                  10.8985        10.8550     +0.40%         +10.78%     +10.9345    +10.8294
 Dollar/Sweden                8.6645         8.6959      -0.03%         -7.31%      +8.7300     +8.6361
 Euro/Sweden                  10.2749        10.2782     -0.03%         -1.86%      +10.3155    +10.2580

 (Reporting by David Henry and Karen Brettell in New York and
Ritvik Carvalho in London; editing by Jonathan Oatis)