FOREX-Dollar bounces back from Clinton email blow

* Dollar index still on course for monthly gain, peso steadies

* Fed, BOJ seen keeping respective policies on hold this week

* Euro zone GDP, inflation data due on Monday

By Patrick Graham

LONDON, Oct 31 The dollar recovered some ground on Monday after a Friday night slide following news that the FBI was investigating newly discovered emails related to Hillary Clinton’s private server, knocking her back in the latest polls of voters.

A Clinton win in next month’s U.S. presidential election is generally now seen by analysts as likely to be a positive for the dollar, clearing the way for the second rise in a decade in official U.S. interest rates in December.

Victory for businessman Donald Trump, while read as carrying the potential to encourage repatriation of dollars, by contrast would be expected to unnerve investors, supporting the yen and other perceived safe havens for global money.

“The Clinton story of course has had an impact,” said Richard Benson, co-head of portfolio management at currency fund Millennium Global in London.

“The polls are now roughly 50-50, but the probabilities are still hugely in favour of Clinton, given how the votes are spread out (per state). The question is whether people decide to reduce risk ahead of the election.”

He said if that did happen, it would help the yen but damage some emerging market currencies against the dollar.

The Mexican peso, seen as the main barometer in currency markets of Trump’s chances of victory, inched higher in morning trade in Europe after falling as much as 2 percent peak to trough on Friday.

The dollar, still on track for a solid monthly gain despite a more general round of profit-taking by investors last week, rose 0.3 percent against the euro to $1.0960, still just a third of a cent above Friday’s lows.

The dollar index, which tracks the greenback against a basket of six major currencies, added 0.1 percent to 98.489 , up 3.2 percent for October but below last Tuesday’s nearly nine-month high of 99.119.