* ECB keeps rates unchanged, but signals action in December
* U.S. GDP rises at record pace in Q3
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Adds new comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Oct 29 (Reuters) - The euro dropped to a four-week
low against the U.S. dollar on Thursday after the European
Central Bank president flagged further monetary easing in
December.
The dollar also climbed to a three-week high against the
Swiss franc, and rallied from a five-week trough versus the yen.
Data showing record pace in U.S. economic growth for the
third quarter, as well as an improving trend in jobless claims
initially hurt the dollar as a safe haven, as the reports
boosted risk appetite and lifted stocks.
But positive data should help the dollar in the long run,
analysts said.
The market's focus though was on the ECB, as Europe grapples
with the surge in COVID-19 cases that forced national lockdowns
in Germany and France and a regional lockdown in Spain.
The ECB, which kept interest rates steady, committed on
Thursday to contain the growing fallout from a second wave of
coronavirus infections, saying it would hone its response by its
December meeting.
"We agreed, all of us, that it was necessary to take action
and therefore to recalibrate our instruments at our next
Governing Council meeting," ECB President Christine Lagarde told
a news conference. In afternoon trading, the euro fell 0.6% to $1.1671
EUR=EBS , after earlier falling to a four-week low of $1.1650.
The euro also slid 0.3% versus the yen to 122.14 yen
EURJPY=EBS .
"If you look at the price action in rate markets, we saw a
further adjustment lower in some of the forward rate
expectations. So the market is looking at the ECB comments as
indicating further rate cuts," said Erik Nelson, currency
strategist, at Wells Fargo in New York.
"You're also looking at an overall challenging backdrop in
Europe, which means further shutdowns and more restrictions,
more so than in the United States. So it's kind of a perfect
storm that's weighing on the euro at this point," he added.
Rapidly rising COVID-19 infection rates in Europe, along
with caution ahead of the U.S. elections, triggered the worst
market selloff since June earlier this week. The dollar index, with the euro as the largest component,
rose to a four-week high and was last up 0.5% at 93.942 =USD .
Gross domestic product rebounded at a 33.1% annualized rate
last quarter, according to an advance estimate on Thursday, the
fastest pace since the government started keeping records in
1947. A separate report showed 751,000 people filed for state
unemployment benefits in the week ended Oct. 24, compared with
791,000 the previous period.
"Although the data ... appears healthy, it should be taken
with a grain of salt," said Matthew Eidinger, market strategist,
at Cambridge Global Payments. He cited the rise in U.S. COVID-19
cases that could mean more restrictions, which could derail the
economy's recovery.
Against the yen, the dollar rose 0.4% to 104.67 yen
JPY=EBS , rallying from a five-week low hit earlier in the
session.
The dollar also rose 0.6% versus the Swiss franc to 0.9160
franc CHF=EBS , after earlier touching a three-week peak of
0.9172.
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Currency bid prices at 3:03PM (1903 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1671 $1.1746 -0.64% +4.10% +1.1759 +1.1650
Dollar/Yen JPY=D3 104.6700 104.3250 +0.34% -3.62% +104.7200 +104.0300
Euro/Yen EURJPY= 122.15 122.52 -0.30% +0.16% +122.8700 +121.9000
Dollar/Swiss CHF=EBS 0.9160 0.9104 +0.63% -5.33% +0.9172 +0.9089
Sterling/Dollar GBP=D3 1.2927 1.2979 -0.39% -2.53% +1.3025 +1.2882
Dollar/Canadian CAD=D3 1.3320 1.3322 -0.02% +2.52% +1.3389 +1.3279
Aussie/Dollar AUD=D3 0.7029 0.7048 -0.28% +0.16% +0.7076 +0.7003
Euro/Swiss EURCHF= 1.0691 1.0692 -0.01% -1.48% +1.0702 +1.0679
Euro/Sterling EURGBP= 0.9026 0.9045 -0.21% +6.77% +0.9059 +0.9008
NZ NZD=D3 0.6624 0.6637 -0.20% -1.56% +0.6659 +0.6597
Dollar/Dollar
Dollar/Norway NOK=D3 9.5200 9.3640 +1.72% +8.59% +9.5925 +9.3345
Euro/Norway EURNOK= 11.1126 11.0070 +0.96% +12.96% +11.2075 +10.9495
Dollar/Sweden SEK= 8.9291 8.8264 +0.26% -4.48% +8.9475 +8.8260
Euro/Sweden EURSEK= 10.4211 10.3941 +0.26% -0.46% +10.4345 +10.3755