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FOREX-Euro edges lower on report of coronavirus lockdown for France

Published 28/10/2020, 01:42
Updated 28/10/2020, 01:48

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Report of new lockdowns in France hurts euro
* Investors grow nervous before U.S. elections
* Aussie in focus amid expectations for monetary easing

By Stanley White
TOKYO, Oct 28 (Reuters) - The euro fell against the dollar
on Wednesday after a media report that France's government is
leaning toward reinstating a national lockdown to curb a
resurgence in coronavirus infections.
The dollar strengthened slightly against other major
currencies, but sentiment for the greenback is turning bearish
due to uncertainty about the outcome of the U.S. presidential
election next week.
Traders are bracing for more volatile trade in currency
markets because the coronavirus is spreading rapidly again in
Europe, Britain, and the United States, which threatens economic
growth. Concern about the U.S. elections is another major risk
that will keep currencies on edge.
"The coronavirus spike is certainly a concern for France and
southern Europe, so the euro's upside is heavy," said Junichi
Ishikawa, senior foreign exchange strategist at IG Securities in
Tokyo.
"I don't expect the dollar to gain much against elsewhere,
because people have been overly complacent about how markets
will react after the U.S. election."
The euro EUR=EBS fell 0.15% to $1.1780 in Asia on
Wednesday, down for a third consecutive trading session.
Sterling GBP=D3 fell 0.11% to $1.3030 but is likely to be
supported by hopes for a last-minute trade deal between Britain
and the European Union. The dollar steadied at 104.50 yen JPY=D3 after a 0.4%
decline on Tuesday that brought it close to a one-month low.
French President Emmanuel Macron will give a televised
address on Wednesday evening.
His office did not say what the speech is about, but French
media reported on Tuesday that the government is exploring
bringing in a national lockdown from midnight on Thursday.

A second wave of coronavirus infections in many countries
ahead of winter in the northern hemisphere has fanned concerns
that economic growth will weaken once again.
Traders say the bigger focus is on the United States, which
is also struggling to contain the coronavirus as people vote
early before elections on Nov. 3.
Domestic polls show Democrat rival Joe Biden has a lead over
Republican incumbent President Donald Trump, but some investors
are sceptical because the polls did not predict Trump's election
four years ago.
Legal battles between Republicans and Democrats over how to
count votes have raised the risk that the outcome of the
election will be disputed, which is a negative factor for the
dollar, some analysts say. Sentiment for the greenback has also weakened after Trump
conceded that an additional round of U.S. fiscal stimulus is
unlikely before the election. The Australian dollar AUD=D3 remained lower after data
showed consumer prices in the third quarter rose 1.6% from the
previous quarter, which was slightly more than the median
estimate.
The Reserve Bank of Australia is widely expected to lower
interest rates and expand its government debt purchases at its
next meeting on Nov. 3.

========================================================
Currency bid prices at 9:15AM (015 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1774 $1.1796 -0.17% +5.04% +1.1799 +1.1770
Dollar/Yen JPY=D3 104.5250 104.4350 +0.08% -3.78% +104.5500 +104.5000
Euro/Yen EURJPY= 123.07 123.14 -0.06% +0.92% +123.1800 +123.0000
Dollar/Swiss CHF=EBS 0.9094 0.9088 +0.06% -6.02% +0.9099 +0.9090
Sterling/Dollar GBP=D3 1.3026 1.3047 -0.19% -1.82% +1.3042 +1.3020
Dollar/Canadian CAD=D3 1.3195 1.3187 +0.08% +1.59% +1.3199 +1.3185
Aussie/Dollar AUD=D3 0.7121 0.7129 -0.12% +1.48% +0.7124 +0.7113
NZ NZD=D3 0.6696 0.6708 -0.16% -0.48% +0.6708 +0.6694
Dollar/Dollar


All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX


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