* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Saikat Chatterjee
LONDON, Oct 20 (Reuters) - The euro rebounded to a one-week
high on Tuesday as global stocks recovered from early losses
with investors broadly in consolidation mode before the No. 3.
U.S. presidential election.
Markets stayed within well-worn recent ranges as fading
hopes for a U.S. coronavirus aid package combined with rising
infections in Europe kept the overall mood cautious.
"Currency markets are in wait-and-watch mode with traders
unwilling to take big bets before such a major event risk," said
Lee Hardman, currency strategist at MUFG in London.
The euro EUR=EBS rebounded 0.3% to a one-week high at
$1.18065 after weakening 0.1% to $1.17600 in early London
trading.
That reflected a broader recovery in European stock markets
which popped into positive territory after registering some
early losses. U.S. stock futures ESc1 were also up 0.6%.
While markets are confident a win by Democrat Joe Biden
would lead to more fiscal stimulus, potentially weakening the
dollar, investors are also wary of a contested election result
that might boost the safe-haven appeal of the greenback.
"As we approach U.S. elections and with COVID infections
around the globe rising at a fast pace, investors may refrain
from engaging into large trading positions," said Charalambos
Pissouros, a senior market analyst at JFD Group.
France reported a massive jump in people hospitalized and
Ireland announced some of Europe's toughest restrictions.
Elsewhere, the Australian dollar dropped 0.4% to $0.7045
AUD=D4 , hitting a three-week low of $0.7032 on increasing
expectations of monetary easing next month by the central bank.
Minutes of the Reserve Bank of Australia's (RBA) last policy
meeting confirmed the Board had discussed cutting rates and
buying longer-dated debt as a means to support the economy and
restrain the currency. Sterling held on to small gains made the previous day at
$1.2941 GBP=D4 .
Britain's chief Brexit negotiator David Frost said there was
no basis to resume trade talks with the European Union unless
there was a fundamental change in Brussels' approach.
Elsewhere, the dollar index =USD dipped 0.2% to 93.227, on
track for a second consecutive day of falls.
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FX graphic https://tmsnrt.rs/3jlBR3O
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