Markets knocked by tougher COVID curbs in Europe to fight a second wave of the pandemic and no sign of a vaccine anytime soon.
Markets fear a new wave of lockdowns could stall the global recovery. Analysts say the rise in coronavirus infections and no sign of a vaccine anytime soon is hitting sentiment.
Some European countries are reporting record high Covid-19 cases, prompting leaders to choose between two drastic solutions. Limiting local restrictions would help keep economies open but may not stop another wave of the virus. A short national lockdown may be safer, according to health experts, but could shock economies once again.
France has imposed curfews as coronavirus infections rise. Other European Union members were also responding to spiking new cases with fresh restrictions.
Policymakers in the United States fail to agree on an economic stimulus package ahead of presidential elections next month. The U.S. Treasury Secretary Steven Mnuchin said such a deal would be difficult.
The International Monetary Fund is predicting a long and uneven recovery, but some banks are still winning big.
A two-day summit of EU leaders starts on Thursday as the EU and Britain continue their efforts to overcome stumbling blocks.
Investors will also tune into European Central Bank President Christine Lagarde, who takes part in a debate on the global economy.
START TRADINGForex – COVID curbs gathering pace knock markets
The risk-off mood kept the U.S. dollar supported and most other major currencies on the defensive. Hopes for U.S. stimulus before the Nov. 3 election are fading, ditching riskier assets
The dollar index traded at 93.78, a one-week high, while riskier assets, were down more than 1% on the day.
The euro drooped 0.25% against the dollar to $1.1716, its lowest in a week.
The Japanese yen was steady at 105.23 to the dollar.
The Australian dollar hit a two-week low after the head of the central bank hinted at possible monetary easing.
The New Zealand dollar followed suit, losing 0.8% against the U.S. currency.
Elsewhere, the British pound fell 0.4% to $1.2961 GBP=D3 and dipped 0.2% against the euro to 90.44 pence.
Oil prices also fell as the renewed surge in the virus in large parts of the world underpinned concerns about economic activity.
Brent crude futures dropped 2.3% to $42.31 a barrel. U.S. West Texas Intermediate (WTI) crude futures dropped back to $39.97 a barrel.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money