Euro Holds Steady Ahead of ECB Meeting

Euro

The euro was almost unchanged against other major currencies following yesterday's sharp drop as investors await the European Central Bank Monetary meeting. The single currency came under pressure as Merkel and Macron ordered their governments to go back to lockdown measures as coronavirus cases continued to soar. Investors are looking forward to the outcome of the monetary policy meeting to know how the bank will overcome the latest emerging risks. The market is not pricing-in a change in policy in today's meeting, but paving the way for a change in the December meeting. The EURUSD is currently trading in a tight range near $1.1750.

Equities

Major stock benchmarks around the world were under significant pressure amid growing concerns over the impact of the second wave of COVID19. The new cases are soaring worldwide, forcing governments to impose movement restrictions, which would disrupt the ongoing economic recovery. However, the sharp losses triggered investors' interest, and stock-indices were able to nurse partial losses. The Dow Jones Industrial Average futures traded back above 26700, the S&P500 futures recovered to 3310, and Nasdaq futures inched higher to 11295.

USD

The dollar index, which measures the greenback against a basket of major currencies, surrendered partial gains falling to 93.33. Investors anticipate the first reading of the third-quarter GDP to grasp further insight into the economic recovery during the past quarter. On the other hand, the recent spread of COVID19 weighed on risk appetite, supporting the flow into havens such as the dollar.

JPY

The Japanese Yen was flat against rivals following the Bank of Japan monetary policy meeting. The board kept policy unchanged and expressed willingness to act further if needed. The USDJPY continued to find support near 104 level, making it significant to traders.

CAD

The Canadian dollar weakened on the dovish Bank of Canada meeting outcome. The bank kept policy unchanged with interest rates at their historically low level of 0.25%. Inflation is expected to remain below 2% through 2022, suggesting further action to push it higher. On the other hand, the drop in oil prices also weighed on the CAD strength. Currently, the USDCAD is trading near 1.33 handle, and EURCAD is holding above 1.56.

Metals

Precious metals prices tumbled as investors doubt a deal over stimulus anytime soon. The price of a gold ounce dropped to a one-month low of $1869, the price of a silver ounce fell below the 100-day simple moving average to $23.02, and palladium futures recovered to $2270 after falling to $2212.

Oil

Oil prices fell further amid growing woes over the impact of the second wave of COVID19. Governments are adopting lockdown measures again to stop the spread, which would weigh on economic activity. On the other hand, the US Energy Information Administration reported a buildup in inventories of 4.320 million barrels. The West Texas Intermediate crude December delivery fell to $36.98, and Brent blend December delivery declined to $38.70.

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