* Covid second-wave worries lift dollar modestly
* AUD, NZD resilient as FX traders wait-and-see ahead of election
* Sino-U.S. tensions drive yuan drop
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Oct 27 (Reuters) - The dollar clung to small gains on Tuesday as the greenback's safe-haven appeal was burnished by worries about a second wave of COVID-19, which drove the steepest stock market selloff in a month and underpinned a bond rally.
The United States, Russia and France all hit new daily records for coronavirus infections and overnight the S&P 500 index .SPX fell 1.9% and Germany's DAX .GDAXI dropped 3.7%.
Moves in the currency market were more muted, though the dollar index =USD lifted about 0.3% overnight and held there early in Asia trade while regional equities fell. MKTS/GLOB
The largest gains for the greenback on Monday came against the EUR= , up 0.4%, which was hit by a drop in German business confidence, and a 0.7% rise on the Canadian dollar CAD= as oil prices slumped. O/R
The yuan CNH= nursed a 0.5% loss as Sino-U.S. tensions flared over arms sales to Taiwan. dollar is broadly stronger, but not massively," said National Australia Bank senior FX strategist Rodrigo Catril.
Structural forces, like low real yields, have held back further gains, he added, and so has a wait-and-see approach to the U.S. election.
"I think many would probably remember the bad experiences we had going in to the Trump-Clinton election (in 2016)," said Catril.
"If you had a position on, you would have been whipsawed big time. I think the strategy this time is to travel light, and to choose the opportunity on the day rather than take on a very, very strong position going into the election."
The usually risk-sensitive Australian AUD= and New Zealand dollars NZD= dipped only marginally overnight and were firm in the early part of the Asia session. AUD/
The Japanese yen JPY= did not move much as U.S. equities sold off, and was steady at 104.76 per dollar in Asia. Sterling GBP= slipped overnight but was back above $1.30 on Tuesday.
A week out from polling day, national polls give Democrat Joe Biden a solid lead but the contest is much tighter in battleground states that could decide the outcome.
Biden and President Donald Trump both spent Monday campaigning in Pennsylvania. regard a Biden victory, and especially Democrat control of the Senate, as negative for the dollar since it is expected to deliver big stimulus spending that would boost investor sentiment and drive demand for riskier currencies.
Positioning data showed long bets on the yen shrank for a fourth straight week last week, as investors wagered on a Biden victory, though short bets against the yen also fell - pointing to heightened uncertainty around the vote. 0#NETUSDFX=
The euro nursed losses at $1.1809, having borne the brunt of worries about fresh coronavirus lockdowns and slipping after the German Ifo business climate index fell by more than expected and for the first time in six months in October. are waiting for any news to emerge from a meeting of China's Communist Party leaders to set the next five-year plan, while keeping a wary eye on the potential fallout from U.S. arms sales to Taiwan.
China said it will impose sanctions on Lockheed Martin (NYSE:LMT) LMT.N , Boeing (NYSE:BA) Defense BA.N and Raytheon (NYSE:RTN) RTX.N . the Turkish lira TRYTOM=D3 hit a record low on Monday amid a slew of geopolitical concerns and as a surprise central bank decision to keep its policy rate on hold last week reveberates through markets. bid prices at 8:31AM (031 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Euro/Dollar
EUR=EBS
$1.1814
$1.1810
+0.04%
+5.38%
+1.1815
+1.1805 Dollar/Yen
JPY=D3
104.8100
104.8500
+0.00%
-3.47%
+104.8800 +0.0000 Euro/Yen
EURJPY=
123.81
123.80
+0.01%
+1.53%
+123.8600 +123.7100 Dollar/Swiss
0.9076
0.9078
-0.01%
-6.20%
+0.9082
+0.9077 Sterling/Dollar GBP=D3
1.3021
1.3022
+0.02%
-1.80%
+1.3023
+1.3016 Dollar/Canadian CAD=D3
1.3196
1.3213
-0.10%
+1.61%
+1.3211
+1.3199 Aussie/Dollar
AUD=D3
0.7129
0.7123
+0.10%
+1.62%
+0.7132
+0.7116 NZ
NZD=D3
0.6683
0.6678
+0.12%
-0.64%
+0.6686
+0.6675 Dollar/Dollar
All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX