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FOREX-Dollar dips in nervous trade as Biden inches closer to White House

    * 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 slipped to its weakest
level in more than two years against the yuan and ground lower
against other Asian currencies as Democrat Joe Biden edged ever
so closer to the White House in a nail-biting U.S. presidential
     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. Late reporting showed the former vice president
with a lead in Nevada and Arizona, while Trump held a lead in
    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 onshore yuan briefly rose to over a two-year
high of 6.6381 per dollar, extending its recent gains as China's
currency has become a popular trade to bet on a Biden victory.
    Emerging market currencies such as the Malaysian ringgit
 and the Indonesian rupiah also rose against the
    The euro bought $1.1713 in Asia on Thursday,
steady from the previous session.
    The British pound fell 0.35% to $1.2947. Against
the euro, the pound fell 0.22% to 90.45 pence.
    The dollar was little changed at 104.34 yen.
    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
    Some analysts said Republican control of the Senate would
prevent a Biden government from raising corporate taxes, which
is positive for equities. However, a divided government also
decreases the chances of big fiscal stimulus, which could be
seen as a negative, other analysts said.
    The Mexican peso, which had suffered from the Trump
administration's hard line on trade, gave up some of its 0.9%
gain on Wednesday and fell back to 21.03 per dollar.
    Currency bid prices at 11:24AM (0224 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar                  $1.1713        $1.1725     -0.09%         +4.49%      +1.1739     +1.1711
 Dollar/Yen                   104.3400       104.5000    -0.19%         -3.97%      +104.4900   +104.2400
 Euro/Yen                     122.21         122.53      -0.26%         +0.21%      +122.6200   +122.2200
 Dollar/Swiss                 0.9124         0.9119      +0.07%         -5.69%      +0.9127     +0.9109
 Sterling/Dollar              1.2947         1.2993      -0.35%         -2.38%      +1.2990     +1.2930
 Dollar/Canadian              1.3172         1.3136      +0.30%         +1.42%      +1.3178     +1.3120
 Aussie/Dollar                0.7150         0.7178      -0.39%         +1.90%      +0.7189     +0.7146
 NZ                           0.6684         0.6706      -0.33%         -0.67%      +0.6706     +0.6679
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Tokyo Forex market info from BOJ 

 (Reporting by Stanley White
Editing by Shri Navaratnam)