* Small overnight rebound in risk currencies stalls
* Dollar, yen steady as traders brace for election volatility
* RBA expected to cut rates and announce QE at 0330 GMT
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Nov 3 (Reuters) - The U.S. dollar hovered near a one-month high on Tuesday as investors opted for caution in the hours ahead of polls opening on election day in the United States.
Traders are on edge over the result and rather than betting outright on a particular outcome, many have lately flocked to the safety of dollars so that they are well positioned to take advantage of volatility when results arrive.
Against a basket of currencies, the dollar held at 94.050, just below a month-high hit on Monday. The safe-harbour yen has also ground higher in recent weeks and it was steady at 104.75 yen per dollar early in Asia trade.
The risk-sensitive Australian dollar was steady at $0.7054 ahead of a crucial central bank policy meeting where markets expect a rate cut and a shift to quantitative easing.
"We have pared back a lot of our positions," said Stuart Oakley, a London-based executive at Nomura.
"It's a bit reckless to position ourselves for one outcome of the election... We've positioned ourselves to trade the post (election) volatility."
Opinion polls have consistently showed Democrat challenger Joe Biden leading President Donald Trump. Analysts said a Biden win could weaken the dollar as he intends to spend big on stimulus, while a steadier foreign policy could lift trade-exposed currencies.
But with battleground states too close to call and with the prospect of either a Trump victory or an inconclusive result likely to support the dollar, moves on Tuesday were slight.
The New Zealand dollar, which like the Aussie recovered from a Monday low along with a bounceback in equities, was steady at $0.6630. The euro sat just above a one-month trough at $1.1639 and sterling was below $1.30.
Beneath the steady spot prices, volatility gauges are soaring in an indication that things could get bumpy as election results arrive through the Asia session on Wednesday.
One-week implied volatility for the euro and yen were both above 11%, the highest since the beginning of April. One-week implied volatility for the yuan was over 12% and a fraction below Monday's five-year peak.
"The risk of a period of heightened currency volatility appears to be more certain," said Commonwealth Bank of Australia currency analyst Kim Mundy in a note to clients.