By Naomi Tajitsu LONDON (Reuters) - The dollar slipped against the euro and yen on Tuesday as investors awaited the results of the U.S. presidential election, while markets also anticipated interest rate cuts in the euro zone and the UK this week. The Australian dollar recovered from a stumble earlier in the global session after the Reserve Bank of Australia delivered another bigger-than-expected rate cut as it tries to shore up its economy in the face of a global recession. Currency movements were muted, and analysts said that liquidity was thin as traders awaited the outcome of the U.S. vote. Many said that any decisive result would likely be positive for the dollar, but some added that initial reactions to the results could be limited. "I don't think anyone in Europe will be wanting to take any chances and hold big overnight positions ahead of the results," said Steve Barrow, head of G10 currency research at Standard Bank in London, adding that this would likely keep trade volatile and directionless in Europe. Polls showed Democrat candidate Barack Obama was leading Republican nominee John McCain in enough states to give him more than the 270 electoral votes he needed to win the presidency, while McCain was determined to pull off what would be the biggest upset in recent U.S. political history. The first polls will begin to close at 2300 GMT, and voting will end over the following six hours. By 0907 GMT, the euro inched up around 0.2 percent to $1.2670 according to Reuters data, near a session high of $1.2690. A mild rise in European shares maintained the lull in risk aversion, which also weighed on the dollar. The dollar has rallied dramatically in the past month or so, scaling a 2-1/2-year high against the euro and multi-year peaks against other high-yielding currencies as panicked investors dumped risky assets and repatriated their proceeds back into the U.S. currency. The U.S. currency slipped about 0.2 percent to 98.86 yen, pulling away from the day's high of 99.34 yen touched earlier in the day. RBA RATE CHOP The Australian dollar traded roughly half a percent lower at $0.6745, trimming losses following a tumble to $0.6597 after the Reserve Bank of Australia cut rates by 75 basis points to 5.25 percent, more than the expected 50 basis points. Against the yen, the Australian currency traded around 0.8 percent lower at 66.65 yen, but had pulled away from a session trough of 65.08 yen. The RBA's move comes before rate decisions by the Bank of England and the European Central Bank on Thursday. Markets are forecasting rate cuts by both central banks of 50 basis points or more. Given the RBA's sizeable cut, analysts were not ruling out the possibility of any surprise moves, with the prospect of a bigger BoE cut seen well on the cards. "The wider implication of the RBA move is that it will bolster expectations of similar punchy interest rate cuts elsewhere, notably in the UK where the market is nearly fully priced for a 75bp cut," Calyon analysts wrote in a research note. "The current grim economic conditions could justify a cut of any magnitude." (Reporting by Naomi Tajitsu; editing by Stephen Nisbet)

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