By Chuck Mikolajczak
NEW YORK, Nov 3 (Reuters) - The dollar seesawed between modest gains and losses on Tuesday as investors gauged uncertainty over a possible US-Iran deal and the outcome of US midterm elections, while the Australian dollar and the Chinese yuan softened after policy moves by their respective central banks.
Investors are weighing the market implications of a possible shift in control of the US Congress in Tuesday's midterm elections, focused on whether a strong Democratic showing could
pave the way for greater volatility in asset prices, particularly the AI trade, which has been a main driver for markets.
The greenback oscillated between modest gains and losses on the day as oil prices were volatile following conflicting signals surrounding talks to end the war in Iran.
A senior Iranian official told Reuters that Iran and the United States are still far from a deal to end their war, while mediator Qatar stepped up efforts to bridge differences and avert a renewed escalation after the US midterm elections.
In addition, US President Donald Trump said he made a deal with Israeli Prime Minister Benjamin Netanyahu that Washington would stop $4 billion in funding to Israel after the end of this year, although it will still sell weapons to the country.
"The sad way to put it is that we're just getting very mixed messages... it's kind of like one step forward and then another one backward. So it's a little bit confusing, a little bit frustrating," said Juan Perez, senior director of trading at Monex USA in Washington.
"My overall take is the US dollar has room to lose, and part of it is because you now no longer have consensus when it comes to the Federal Reserve. And the other thing is, if you are going to have government or political friction, which is more likely the case, that's probably likely going to lead to a dollar negativity."
DOLLAR INDEX EDGES HIGHER
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, edged up 0.07% to 101.83, with the euro up 0.07% at $1.1193.
After falling as much as 0.17% on the day, the dollar moved higher after the Labor Department said in its Job Openings and Labor Turnover Survey, or JOLTS report, that job openings, a measure of labor demand, rose by 333,000 to 7.523 million, well above the 7.100 million estimate of economists polled by Reuters.
The data is the first of a string of reports on the US labor market, which will culminate with Friday's government payrolls report and help shape expectations for the US Federal Reserve's policy path.
A separate report from the Commerce Department showed new orders for US factory goods rose 1.8% in September, topping the 1.2% forecast, driven in part by bookings for aircraft.
YUAN, AUSSIE DOLLAR UNDER PRESSURE
Elsewhere, markets reacted to earlier announcements from central banks in China and Australia.
The dollar was last up 0.35%, its biggest daily jump since May 15, to 6.67 per offshore Chinese yuan after the central bank raised the amount of foreign currency that financial institutions must hold as reserves, in an effort to slow the currency's recent gains.
After falling as much as 0.51%, the Australian dollar was last off 0.4% versus the greenback to $0.6968 after the Reserve Bank of Australia raised its cash rate by 25 basis points to 4.85%, as expected, in a 6-3 vote and the fifth hike of the year.
Analysts at Goldman Sachs said in a note that they view the decision as "incrementally dovish" and cited the split vote, the exclusion of language emphasizing a tightening bias, and the updated forecast for trimmed mean inflation to decelerate to 2.4% by the fourth quarter of 2028.
Other central banks due to announce policy decisions this week include those of Britain, Norway and Sweden.
Sterling strengthened 0.11% to $1.3418 while the Japanese yen weakened 0.47% against the greenback to 158.66 per dollar.
(Reporting by Chuck Mikolajczak; Additional reporting by Alun John in London, Jiaxing Li in Hong Kong and Ankur Banerjee in Singapore. Editing by Clarence Fernandez, Mark Potter, Andrea Ricci and Chizu Nomiyama )
