The Canadian dollar is getting hammered, along with most of the G-10 major currencies. A wave of safe-haven demand for U.S. dollars washed over FX markets yesterday, leading to substantial losses. Those losses consolidated overnight.

The stampede into safe-haven currencies was sparked by steep increases in the number of new coronavirus cases reported in Europe and America. France was hit so hard that President Macron imposed new lockdown measures on the country beginning Friday. French restaurants and bars will be closed, and travel will be restricted. Germany imposed similar measures. There were a record-setting 80,125 new COVID-19 cases reported in the U.S. on Wednesday.

The resurgence of COVID-19 cases aggravated equity markets. Volumes were reduced due to an abundance of caution ahead Tuesday’s U.S. election, and the poor liquidity exacerbated Wall Street’s selloff. The Dow Jones Industrial Average fell more than 900 points.

Sentiment may change later today when US Q3 data is released.

The U.S. economy is expected to have grown 31.0%, nearly fully-erasing the 31.4% decline in Q2.

Risk-aversion sentiment crushed the Canadian dollar. USDéCAD soared to $1.3330 from $1.3180. The rally got an additional boost from falling oil prices, and a dovish Bank of Canada monetary policy outlook. The central bank left interest rates unchanged at 0.25%, as expected. However, it “recalibrated” the quantitative easing program, and downgraded the 2021 growth forecast. If anyone had thoughts that domestic rates would rise in the near future, BoC Governor Tiff Macklem disabused them of that notion during his press conference. He said, “You can be confident that interest rates will be low for a long time.”

Finance Minister and Deputy Prime Minister Chrystia Freeland said in a speech that her government plans to continue to pump money into the economy, saying it was the best way to ensure a strong economic recovery.

EUR/USD is consolidating yesterday’s losses at the bottom of its overnight range. Euro area coronavirus cases, and the wait until the European Central Bank meeting kept the single currency in a $1.1702-$1.1758 range.

GBP/USD tracked the rest of the G-10 majors, and it is trading at its overnight low of $1.2938, after sliding from $1.3025. A weak U.K. economic outlook and the prospect of negative interest rates is weighing on the currency pair, while hopes for a Brexit trade deal limit losses.

In addition to Q3 Gross Domestic Product, the U.S. weekly jobless claims report is on tap.

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