FOREX-Dollar stabilises, euro near 4-week low after ECB's announcement

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Eimi Yamamitsu
TOKYO, Oct 30 (Reuters) - The dollar paused its climb on
Friday, while the euro wallowed near its four-week low against
the greenback after the European Central Bank signalled further
monetary easing by the end of the year.
Overnight, the euro's decline in addition to U.S. data
helped lift the greenback to a near four-week high against a
basket of currencies.
The ECB kept interest rates steady on Thursday but committed
to contain the growing fallout from a second wave of coronavirus
infections, saying it would hone its response by its December
meeting, as widely expected by the market. "We agreed, all of us, that it was necessary to take action
and therefore to recalibrate our instruments at our next
Governing Council meeting," ECB President Christine Lagarde told
a news conference.
Daisuke Karakama, chief market economist at Mizuho Bank, said
that a build-up of expectations for ECB's monetary easing may
cause risks such as a dollar-buying spree or the euro to fall
further.
"It'd be fine if the ECB can exceed market expectation...
but now that they've made an announcement in advance, there's a
risk if (the December meeting) turns out to be underwhelming,"
Karakama said.
The euro slightly firmed to $1.1679 EUR=EBS in Asia,
after hitting a four-week low of $1.1650 in U.S. trade
overnight.
Against the yen, the common currency slightly eased to
121.79 yen EURJPY=EBS .
Data on Thursday showed the U.S. economy grew at a record
pace for the third quarter and an improving trend in jobless
claims, while scars from the coronavirus recession still
lingered. U.S. gross domestic product rebounded at a 33.1% annualised
rate last quarter, according to an advance estimate on Thursday,
the fastest pace since the government started keeping records in
1947.
Separately, a report showed 751,000 people in the United
States filed for state unemployment benefits in the week ended
Oct. 24, compared with 791,000 the previous period.
The dollar index was flat at 93.889 =USD but sat within
reach of Thursday's four-week high at 93.916, poised to mark the
biggest weekly gains since the end of September.
Still, uncertainty surrounding Tuesday's U.S. presidential
election and coronavirus fears continue to loom over market.
"As dollars were bought mostly against the euro for the past
two days, there's a move to sell the greenback back ahead of the
election," said Makoto Noji, chief FX strategist at SMBC Nikko.
Global daily coronavirus cases rose by over 500,000 for the
first time, with France and Germany going back into coronavirus
lockdowns next week. In the United States, a single-day record was set on
Thursday with over 91,000 new coronavirus cases, as
hospitalisations hit new highs in many states, according to a
Reuters tally. Data due later on Friday include euro zone's third-quarter
gross domestic product and October inflation, while the U.S.
awaits September personal consumption and expenditures as well
as the Chicago PMI.
The Chinese yuan firmed against the greenback as China's
leaders endorsed a new five-year plan to drive sustained
economic growth, which markets believe will require a stronger
currency. The greenback edged lower against the Japanese yen at 104.30
yen JPY=EBS , after rallying overnight from a five-week trough
as it benefited from a rebound in U.S. treasury yields and broad
dollar buying.
Sterling changed hands at $1.2906 GBP=D3 , undermined by a
lack of Brexit-related headlines as London and the European
Union have just two months to reach a post-Brexit trade
agreement.
Among antipodean currencies, the Aussie AUD=D3 last sat at
$0.7032, a fraction above a three-month low of $0.7002 marked
overnight.
Meanwhile, the kiwi NZD=D3 held steady, last fetching
0.6619 per dollar.