EUR/USD pushing lower, hits fresh one-month lows at 1.1650
- EUR/USD dips to a fresh one-month low at 1.1650
- The euro dives on dovish ECB rhetoric and COVID-19 lockdowns.
The euro has extended its four-day downtrend against the US dollar on Thursday, extending its decline from last week’s highs at 1.1875 below 1.1700 to hit fresh October lows at 0.1650 so far.
Euro suffering on dovish ECB and COVID-19 lockdowns
The European Central Bank sent the euro tumbling earlier on Thursday after suggesting the introduction of further monetary stimulus measures in December.
ECB President Lagarde assured, after the conclusion of the latest monetary policy meeting, that policymakers are prepared to “recalibrate” their tools in December. This has been taken by the market as a signal that the Bank is ready to provide extra support for the worst coronavirus-stricken economies.
Apart from that, the surging numbers of COVID-19 infections in Europe and the new lockdowns introduced in Germany and Francene, with Spain closing regional borders, have increased investors’ concerns about the impact of these measures on the incipient economic recovery.
EUR/USD, weaker after the ECB’s dovish turn – TD Securities
On the technical level, the FX analysis team at TD securities sees the euro tilted to the downside although a new catalyst will be needed to extend decline below 1.1600: "EURUSD is weaker after the ECB's dovish turn this month, but follow-through selling pressure has been fairly muted — so far. From here, we think investor attention will migrate quickly to month-end considerations and next week's US election. We see some further downside risks for spot near-term as the market still looks short USDs overall. That said, we think fresh catalysts would be needed to see a clear push to a new trading range below 1.16 in advance of the vote."
Technical levels to watch