iFOREX Daily Analysis : October 20, 2016

 | Oct 20, 2016 05:00AM ET

The euro dropped to a three-month low before a European Central Bank meeting later on Thursday, while the Mexican peso rose to a six-week high after the conclusion of the final U.S. presidential debate before the November election. The main focus for investors is whether or not ECB President Mario Draghi will give any indications that the bank may alter its quantitative easing program. The Mexican peso, which is closely watched, is vulnerable to Republican Donald Trump's economic policy proposals and rose to 18.4555 to the dollar its highest level since Sept. 8 as the most recent opinion polls have favored Clinton. A CNN snap poll of debate watchers found Clinton won with 52 percent, and Trump trailed with 39 percent. The pound held steady at $1.2281 ahead of British Prime Minister Theresa May's first European Union summit since Britain's vote to exit the bloc. For today, the U.K. is to report on retail sales, the ECB is to announce its benchmark interest rate followed by a press conference with President Mario Draghi and the U.S. is to produce data on jobless claims, existing home sales and manufacturing activity in the Philadelphia region.

EUR/USD

The euro appears to be under heavy pressure against the dollar, remaining close to a three-month low, heading into the ECB meeting on Thursday. ECB president Draghi is expected to keep all possibilities open today while managing market fears of a QE tapering. Meanwhile the Fed’s Beige Book released last night showed overall that the US economy maintained a steady growth pace between late August and early October. The latest debate between presidential candidates brought little change in major currencies with the main driver for the day being the ECB meeting and the press conference that follows by ECB president Mario Draghi. Later in the day, the U.S. is to produce data on jobless claims, existing home sales and manufacturing activity in the Philadelphia region.