News: FOREX-Dollar gains as investors cautious before U.S. election

• Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Updates prices)

The U.S. dollar hit one-month highs against a basket of peers on Monday and expected volatility in major currencies rose to the highest levels since April on investor jitters over the outcome of Tuesday's U.S. presidential election.

The dollar has strengthened in the past week as risk sentiment soured, with investors reducing positions due to uncertainty over the result.

"The move we saw last week was a pretty broad derisking and I think that makes a lot of sense; people are naturally skeptical about any sort of prognostication with regards to the election after what happened four years ago," said Erik Nelson, a macro strategist at Wells Fargo in New York.

Democratic challenger Joe Biden leads in national opinion polls, but the race looks close enough in battleground states that President Donald Trump could win the 270 Electoral College votes needed to win.

Investors are also hesitant to trust polls after the majority failed to predict Trump's victory in 2016.

"The closer the election is, the more likely it is to be delayed or contested and that's the perfect storm for risk assets to go down," Nelson said.

The dollar index =USD was last up 0.02% at 94.12 after reaching 94.29, the highest since Sept. 29. The euro EUR= dipped 0.14% to $1.1631 and the greenback climbed 0.16% to 104.81 yen JPY= .

One-week implied volatility gauges for the euro EUR1WO=R and the yen JPY1WO=R were both above 11%, the highest since the beginning of April.

"Volatility is rising because liquidity for hedges around the election is very thin. Everyone's the same way, there's no one selling this stuff thinking everything's great," said Jordan Rochester, forex analyst at Nomura. Generally, traders are hedging for a decline for the euro and a rise for the dollar.

A surge in global coronavirus cases also weighed on sentiment. In Europe, new COVID-19 cases have doubled in five weeks, a Reuters tally showed, with total infections surpassing 10 million.

The British pound also weakened after Prime Minister Boris Johnson announced over the weekend a one-month lockdown across England.

Sterling fell as low as $1.2852 GBP= , the lowest since Oct. 7. It was last trading at $1.2900, down 0.32% on the day.

The Federal Reserve will conclude its two-day meeting on Wednesday. U.S. jobs data for October is also in focus on Friday.

  ======================================================== 
	Currency bid prices at 3:00PM (2000 GMT) 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	  EUR=		$1.1631		$1.1647	 -0.14%		 +3.76%	  +1.1656	 +1.1623 
 Dollar/Yen	   JPY=		104.8100	   104.6400	+0.16%		 -3.72%	  +104.9400   +104.5600 
 Euro/Yen		 EURJPY=	 121.93		 121.88	  +0.04%		 -0.02%	  +122.1500   +121.7100 
 Dollar/Swiss	 CHF=		0.9199		 0.9167	  +0.35%		 -4.95%	  +0.9207	 +0.9152 
 Sterling/Dollar  GBP=		1.2900		 1.2941	  -0.32%		 -2.71%	  +1.2952	 +1.2855 
 Dollar/Canadian  CAD=		1.3230		 1.3317	  -0.65%		 +1.88%	  +1.3370	 +1.3226 
 Australian/Doll  AUD=		0.7048		 0.7026	  +0.31%		 +0.38%	  +0.7053	 +0.6992 
 ar																							  

 Euro/Swiss	   EURCHF=	 1.0701		 1.0678	  +0.22%		 -1.39%	  +1.0705	 +1.0672 
 Euro/Sterling	EURGBP=	 0.9016		 0.8994	  +0.24%		 +6.65%	  +0.9049	 +0.8996 
 NZ			   NZD=		0.6628		 0.6616	  +0.18%		 -1.60%	  +0.6634	 +0.6590 
 Dollar/Dollar																				   

 Dollar/Norway	NOK=		9.5800		 9.5347	  +0.48%		 +9.13%	  +9.6073	 +9.5229 
 Euro/Norway	  EURNOK=	 11.1430		11.1100	 +0.30%		 +13.27%	 +11.1708	+11.0904 
 Dollar/Sweden	SEK=		8.9204		 8.8823	  -0.03%		 -4.57%	  +8.9407	 +8.8799 
 Euro/Sweden	  EURSEK=	 10.3757		10.3783	 -0.03%		 -0.89%	  +10.3910	+10.3400