Via the Financial Times a key risk for a continued euro rally, a double-dip recession brought on by the 2nd wave of COVID-19 infections gaining pace across the continent.

Germany, France, UK, Italy, Spain, Netherlands have all brought in new restrictions to counter the 2nd wave growth

  • Further restrictions are expected to be announced this week.

“I can’t believe how fast the second wave has hit,” said Katharina Utermöhl, senior economist at Allianz. “We now see growth turning negative in several countries in the fourth quarter — another recession is absolutely possible.”

FT link. (may be gated)

Europe is already looking worse on economic data indications, positioning is also a weight on EUR/USD.