The euro nosedived to a 1-week low against the dollar this morning, continuing its three-day slide as Europe’s virus numbers continue to break records ahead of Thursday’s European Central Bank decision. Across the G10 currency board, the euro is the worst performer against the dollar overnight. Italy suffered the most daily deaths since May, while new infections in Spain surged by 59% vs a day earlier. France will likely announce new measures tonight, with the biggest one being a one-month lockdown starting this week, after the nation suffered the highest number of daily deaths since April. German Chancellor Angela Merkel is also pushing for stricter curbs, including the closure of bars, restaurants and leisure facilities until the end of November. Dutch Prime Minister Mark Rutte held a televised address last night, extending the current containment measures to the end of 2020. The virus developments in the eurozone put mounting pressure on the ECB to boost stimulus as the outbreaks are showing no signs of slowing down. 

  

The dollar continues to trade with a firm tone this morning, making continued inroads against the euro and yen in particular. A group of eight major business lobbies, including the US Chamber of Commerce and the Business Roundtable, released a rate joint statement calling for peaceful and fair elections and patience in the event that an election result takes longer than normal to become clear as mail-in votes are counted. President Donald Trump has repeatedly refused to commit to conceding defeat in the event announced vote tallies suggest a victory for Joe Biden, while also attacking the integrity of mail-in voting. Estimates from the US Elections Project suggested that more than 66 million votes had already been cast as of Tuesday morning, surpassing the total advance votes in 2016 by 8m. The high rate of mail-in votes may lead to delays in results announcement, or possibly even disputes over their validity.  Yesterday’s data included a firm print for monthly durable goods orders in September, faster than expected increases in house prices, and a beat for the Richmond Federal Reserve’s manufacturing survey index.

Sterling has remained on the defensive against the dollar, but the euro’s greater losses in relative terms mean that GBPEUR has risen over the last 24 hours. The Telegraph is reporting on modelling from Downing Street’s scientific advisory group that the accelerating second wave of the coronavirus pandemic will be more deadly than the first and last through winter. Chief Scientific Adviser Sir Patrick Vallance is reportedly lobbying for stricter lockdown measures than currently implemented. The latest announced daily total of coronavirus deaths reached 367 yesterday, the highest total since May 27th. The surge is consistent with the trend in Europe as a whole, where daily deaths have risen by nearly 40% compared to the previous week.