Busy news week here: BoC, BoJ, ECB meetings this week...

One of the most important trading weeks of the year has just begun - the week before the US elections. Now that the final debate is over and more than 49 million Americans have already voted, the market is looking for any possible clues as to the eventual winner and the implications for the market.

The week is also filled with central bank interest rate decisions. One of them, the ECB on Thursday, is of particular importance due to the increase in the number of COVID-19 cases in Europe and the curfew in force in many European countries.

European stocks start the week in the red

European stocks opened in the red all the way. The spread of the virus has led to tighter restrictions across the continent. Spain declared a state of emergency and imposed a curfew during the night. Italy has done the same, but with more drastic restrictions - bars and restaurants close at 18:00. France recorded over 49,000 cases on Sunday, reflecting the scale of the epidemic and painting a bleak economic picture, in addition to the health problem.

On Wednesday, the Bank of Canada is expected to keep rates and monetary policy unchanged. The Canadian dollar (CAD) has stabilised lately as the price of oil has found an equilibrium level around $39.

The ECB on Thursday is the main event of the week for currency traders. Faced with the threat of deflation, the ECB is preparing to act through greater quantitative easing and other measures to support the economy.

However, the market consensus is that the ECB will not act at this week's meeting. Instead, it will act at the very end of the year. The argument here is that the ECB may want to wait to see the outcome of the US elections, which the Fed will do next week, and then act in December.

If we look, however, at the progress of the virus lately, then the ECB may be forced to do something else this week than give guidance. If this is the case, the euro will be the currency that moves the most.

The Bank of Japan (BOJ) is also expected to act this week. The yen is one of the currencies that has been trading in narrow ranges lately and has performed best during the crisis so far. Like the BOC, the BOJ is not expected to create any surprises this week.

That leaves everything to the US elections and the ECB on Thursday. Thus, the main driver on the currency dashboard this week should be the EUR/USD pair.