Euro falls on renewed lockdowns, dollar slides on election uncertainty

The euro dropped against the dollar on Wednesday after reports that France’s government was considering a national lockdown to control a resurgence of coronavirus infections.

The dollar nursed losses against the yen on bearish sentiment amid uncertainties about the result of the upcoming U.S. presidential election. It dropped to a near one-month low of 104.23 yen.

The euro sank 0.14% to 1.1780 on the dollar, down for a third consecutive day. The pound steadied at $1.3043, boosted by hopes for a last-minute Brexit trade deal. 

Traders are expecting high volatility in the currency markets as coronavirus cases rise in the United States, Britain, and Europe, fueling worries about weak economic growth.

However, investors’ focus is on the United States, which is struggling to contain the virus amid the presidential election period.

Polls show that Joe Biden has a lead over Donald Trump, but investors are skeptical since the polls did not predict a win for the latter four years ago.

Sentiment for the dollar also dwindled after Trump said that a stimulus package ahead of the election is unlikely.

In onshore trade, the yuan slid to $6.7097 after hitting a 27-month high last week. The Aussie rose on upbeat consumer data.