GBP/USD looks to extend its downside consolidation phase below 1.3050 into the European open, as the US dollar clings onto the overnight gains amid broad risk-aversion. EUR/USD continues to drop as Eurozone’s biggest economies, France and Germany, consider imposing the economically-painful lockdown restrictions to counter the rising coronavirus cases. The pair is currently trading at 1.1778, representing a 0.13% drop on the day, having hit an eight-day low of 1.1769 early Wednesday. The currency pair is trading in the red for the third straight day, having faced rejection near 1.1860 on Monday. France is reportedly considering a one-month lockdown as the second wave of the coronavirus is showing no signs of slowing down. According to Reuters, Eurozone’s economic powerhouse Germany also contemplates a measured lockdown as its health care system is close to breaking point. While these measures look less severe than the ones implemented in April/May, they could still harm Eurozone’s already fragile economic recovery, resulting in a prolonged period of deflation. All things considered, the pressure on the European Central Bank to deliver more stimulus looks to be rising. As such, markets are offering euros. The sell-off will gather pace if the coronavirus numbers continue to rise. The dollar pushed higher in early European trade Wednesday, with traders turning away from riskier currencies given the current uncertainty surrounding the coronavirus pandemic as the U.S. presidential election draws near. The U.S. Dollar Index was up 0.2% at 93.138, while USD/JPY was down 0.2% at 104.19. Trading ranges are becoming more limited as growing wariness about the U.S. presidential election is starting to limit large currency movements. Polls show Democrat rival Joe Biden has a lead over Republican incumbent President Donald Trump, but many traders are nervous as the same polls failed to predict Trump’s victory four years ago. A tight result could lead to legal battles over potential voting irregularities, delaying the outcome of the election and creating more uncertainty, which would likely weigh on the dollar. The former suggests caution due to the rise in the pandemic in Europe and the risk of the U.S. election outcome,” he added, but ”the constructive medium-term outlook and the possibility of missing out (on the rally) suggest that, despite the bumpy ride ahead in coming weeks, periods of risk assets coming under pressure should be one-off and not long-lasting. This means a prolonged USD strengthening trend seems unlikely.