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EUR/USD spot rate at time of publication: 1.1746Bank transfer rates (indicative guide): 1.1335-1.1417Specialist transfer provider rates (indicative): 1.1640More information on specialist rates, hereThe Euro-to-Dollar exchange rate was in focus in midweek trade amidst news that the Eurozone's two largest economies were looking to introduce a 'lockdown lite' in order to stem the accelerating spread of covid-19.

Both France and Germany look set to implement tougher restrictions on their populations, which could deliver some downside in the Euro say analysts at Citi.

Citi - the world's largest primary FX dealer - expect news of the lockdowns to deliver further losses in the Euro. "Our options traders also like EUR downside via vanilla puts given second wave concerns," says Kurran Tailor at Citi.

The EUR/USD rate went down by a third of a percent to reach 1.1742 as markets digested news the French government is reportedly considering a 1-month lockdown starting from midnight on Thursday, with President Emmanuel Macron likely to spell out the final details in an address to the nation on Wednesday night.

This would build on a recently announced 9pm curfew which impacts at least 46 million people.

"The euro corrected, from EUR/USD 1.18 to 1.17, mostly penalised by the unfavourable evolution of the contagion, in the wake of reports that France in particular could put in place further, strict containment measures. For the single currency, this remains an important downside factor, to which the ECB could also restore attention tomorrow," says Asmara Jamaleh, Economist at Intesa Sanpaolo.

France's move to enter a new nationwide lockdown comes as German Chancellor Angela Merkel looks to impose fresh curbs on movement with much of the hospitality sector in Germany looking headed for a shutdown, developments that sparked demand for the Dollar and selling of the Euro.

Merkel says she will seek a meeting with state leaders on Wednesday to agree to close all restaurants and bars from Nov. 4 in a bid to curb coronavirus infections but keep schools and nurseries open, newspaper Bild reported.

Bilt has seen a draft resolution as showing Merkel wanted the 16 premiers of the states to agree to close fitness studios, casinos and cinemas along with theatres, opera houses and concert venues but allow shops to remain open if they implement hygiene measures and limit customer numbers.

Restaurants would only be allowed to offer customers takeaways, it said.

Germany recorded 11,409 new cases on Tuesday and Economy Minister Peter Altmaier said Germany was likely to reach 20,000 new infections a day by the end of the week.

The Dollar surged to multi-month highs as stock markets slumped in the February-March period when the covid-19 crisis first swept the world's major economies, and price action in late October suggests there could be more of the same to come if the current wave of the pandemic and the response by governments continues.

Analysts at Citi note the EUR/USD exchange rate has now broken below the 55 day moving average and strong support which together come in at 1.1800.

Above: EUR/USD falls below its 55 day moving average, a notable technical deterioration. Find out about how to lock in today's rates for use in the future in order to protect your budget, here.

"On the downside, watch 1.1740," says Tailor, beyond here the next layer of support is located at the early October lows at 1.1700.

"Our options traders also like EUR downside via vanilla puts given second wave concerns, potential for USD strength post the US election under a "gridlock Biden presidency - Republican senate scenario" and cheapening via the r/r to the topside (across 1-3m tenors). EUR positioning also remains very light as outlined in CitiFX Flows & Positioning: Neutral Positioning," says Tailor.

The lockdowns in France and Germany come ahead of Thursday's European Central Bank meeting, where policy makers are expected to sound caution on the deteriorating medical situation in the region.

A question for those watching Euro exchange rates is whether this prompts an early attempt to boost monetary easing. Such a surprise could trigger a lower Euro.

"Whether renewed lockdowns set up dovish risks into Thursday’s ECB remains to be seen," says Tailor.

Citi's Chief FX Strategist Ebrahim Rahbari says he expects the ECB’s Thursday Governing Council meeting to be focused on i) highlighting the persistence of ECB stimulus (pointing towards extending PEPP and other measures in December) and ii) stressing that the ECB has instruments to add stimulus, if needed.

Citi do not think the ECB will surprise markets by bringing forward the PEPP extension or being more open towards deposit rate cuts in the future.