Dollar stable as fresh lockdowns in Europe reduce the risk appetite; ECB in focus

Dollar stable as fresh lockdowns in Europe reduce the risk appetite; ECB in focus

29 Oct 2020 03:35 PM
 

The dollar edged up slightly on Thursday and riskier currencies remained down with markets worried about Europe's second wave of coronavirus infections and cautious ahead of the European Central Bank's meeting.

Rapidly rising COVID-19 infections in Europe, along with caution ahead of the U.S. elections, triggered the worst market sell-off since June earlier this week.

France and Germany walked their countries back into lockdown after Europe's death rate jumped 37% last week.

Implied volatility gauges with a one-week maturity for currency pairs such as euro-dollar and dollar-yen, rose to their highest in more than six months on Wednesday and remained elevated on Thursday.

The dollar which hit the nine-day high in the previous session, held steady overnight and strengthened further in early London trading.

At 1:53 p.m., the euro was down 0.1% against the dollar at $1.173

The ECB is expected to hold off with new stimulus measures this week but is likely to signal more action in December.

Its policy announcement is due at 6:15 p.m., followed by a news conference at 7:00 pm.