* Traders on tenterhooks as U.S. election goes to the wire
* Cable hit by report BOE considering negative rates
* Dollar also in focus before Fed meeting
By Stanley White
TOKYO, Nov 5 (Reuters) - The dollar hunkered down to trade
in a tight range against most currencies as investors awaited
final vote counts in a nail-biting U.S. election that has seen
Democrat Joe Biden edge ever so closer to the White House.
Financial markets, however, were braced for days or even
weeks of uncertainty as Republican incumbent President Donald
Trump has opened a multi-pronged attack on vote counts in
several states by pursuing lawsuits and a recount.
That could hamper the dollar in the short run, traders say.
Elsewhere, sterling fell against the dollar and the euro
after a media report that the Bank of England, which announces a
policy decision later on Thursday, is considering negative
interest rates. The Federal Reserve, which is expected to keep policy on
hold on Thursday, is also in focus as traders navigate market
volatility in the wake of a knife-edge U.S. election that has
pushed up the yuan and the Mexican peso.
Biden has claimed the pivotal Midwestern states of Wisconsin
and Michigan. Results from other important swing states are
expected to trickle in later in the day.
Expectations that a Biden win will take a slightly softer
tone on trade policy is likely to weaken the dollar against the
currencies of countries that often faced the threat of tariffs
during Trump's administration, analysts said.
"The moves in the yuan and the peso show that the market is
trying to price in a Biden victory," said Masafumi Yamamoto,
chief currency strategist at Mizuho Securities in Tokyo.
"For slightly different reasons, we could also see the euro
gain against the dollar."
The euro EUR=EBS bought $1.1736 in Asia on Thursday,
steady from the previous session.
The British pound GBP=D3 fell 0.19% to $1.2967. Against
the euro, the pound EURGBP=D3 fell 0.3% to 90.55 pence.
The dollar was little changed at 104.37 yen JPY=D3 .
Even if Biden manages to surmount the legal challenges from
Trump to become the next president, Republicans look likely to
retain control of the Senate and can use that to stymie Biden's
fiscal policy agenda - another complicating factor for currency
traders.
Investors in Asia will closely watch to see if the onshore
yuan CNY=CFXS extends gains versus the dollar when trade opens
later today, as China's currency has become a popular trade to
bet on a Biden victory.
The Mexican peso MXN= , which had suffered from the Trump
administration's hard line on trade, was steady at 20.94 after
jumping by 0.9% on Wednesday.
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Currency bid prices at 9:08AM (0080 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1736 $1.1725 +0.09% +4.67% +1.1738 +1.1722
Dollar/Yen JPY=D3 104.3700 104.5000 -0.13% -3.92% +104.4900 +104.3600
Euro/Yen EURJPY= 122.48 122.53 -0.04% +0.43% +122.6200 +122.4400
Dollar/Swiss CHF=EBS 0.9111 0.9119 -0.07% -5.82% +0.9127 +0.9112
Sterling/Dollar GBP=D3 1.2967 1.2993 -0.19% -2.22% +1.2990 +1.2930
Dollar/Canadian CAD=D3 1.3124 1.3136 -0.06% +1.05% +1.3138 +1.3126
Aussie/Dollar AUD=D3 0.7181 0.7178 +0.04% +2.34% +0.7185 +0.7165
NZ NZD=D3 0.6702 0.6706 -0.04% -0.39% +0.6702 +0.6688
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX