The Euro is slumping as France and Germany resume national lockdowns to combat surging second-wave Covid cases.
Posted Oct 30, 2020
Euro down on new Covid lockdowns
With the bad news for the EUROZONE economy the Euro to US Dollar (EUR/USD 1-DAY▼0.5%) and Euro to Pound Sterling (EUR/GBP 1-DAY▼0.5%) exchange rates have both extended recent losses to 30-DAY LOWS.
The unwelcome news being that France and Germany have resumed national lockdowns to combat second-wave Covid. With new daily cases in France topping 33,000 the government decided that a national lockdown is the only way to tackle the problem. French President Macron could impose a lockdown from midnight on Friday (23:00 GMT), with the BBC reporting large traffic jams as Parisians aim to spend the lock-down in the country-side.
German Chancellor Angela Merkel announced the new lockdowns, saying the Federal Government had come to an agreement with states to lock down the entire country from November 2 – for at least two weeks.
Shops, schools and kindergartens will remain open but private meetings will be limited to a maximum of 10 people from two households, and all bars, restaurants, cinemas, theatres, pools and gyms are to be closed.
The impact of these measures on the French and German economies builds pressure for additional monetary easing from the ECB, this is worrying the currency markets as the outlook for macroeconomic performance has turned pessimistic.
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Brits stock up travel money with Turkish Lira at record lows
Turkish Lira (TRY) continues it record-breaking slide with GBP/TRY above 10.7 (7-DAY▲3.6%) making holidays to Turkey ever cheaper once, of course, that holiday travel is on the permitted again.
Aussie & Canadian dollars down as global COVID-19 outlook worsens
AUD/USD has edged down towards the important 0.70 rate (4-DAY DOWN▼1.5%). The AUD suffered a “Risk-Off” sell off as markets looked to shed growth and commodity correlated assets amid a sharp correction in the euro.
However, the Canadian Dollar (CAD) has been tipped to rise after hitting a 14-DAY-LOW against the US Dollar after the Bank of Canada’s (BoC) yield curve control to lower longer-term government bond yields.
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