* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E
TOKYO, Oct 29 (Reuters) - The dollar held gains against a basket of major currencies on Thursday as escalating coronavirus cases in Europe stoked investor fears that fresh lockdowns would further hit the already fragile economic recovery.
The safe-haven greenback steadied against a basket of six currencies at 93.39, taking a pause after its 0.3% gains in early trade.
Concerns of further damage to the economy grew as France and Germany went back into lockdown on Wednesday, as a massive second wave of coronavirus cases threatened to overwhelm Europe.
“The vibe is similar to what it was like in late February to early March,” said Rikiya Takebe, senior strategist at Okasan Online Securities, referring to the time when the coronavirus started to spread in the U.S. and Europe.
“Back then, there was a shift to dollar-buying to prevent risks in case of emergency, leading to a higher dollar. I think the current move on the market is somewhat the same,” he said.
The euro changed hands at $1.1753 after sliding to a one-week low of $1.1718 overnight. It moderately rose against the Japanese yen, last fetching 122.79 yen after hitting its weakest levels since July overnight.
Amid surging cases across Europe, the European Central Bank at its meeting is expected to resist pressure on Thursday to unveil new stimulus measures, but will likely pave the way for action in December.
“EUR can fall further if ECB President Christine Lagarde lays the ground work for further policy easing at her post meeting press conference,” said Commonwealth Bank of Australia currency analyst Kim Mundy in a note.
Traders also braced for volatility with the U.S. election less than a week away, while the country, like Europe, also faces an increase in coronavirus infections.
With former Vice President Joe Biden consistently leading in the polls over President Donald Trump, traders are cautiously betting on his victory and a possible “blue wave” outcome, where Democrats control both chambers of Congress.
“While Biden is taking the lead, Trump has been catching up in some parts of swing states,” said Shinichiro Kadota, senior strategist at Barclays.
“There is certainly a possibility of a higher volatility in the market if it becomes a closer battle, involving risks such as full results not being released (on the election day),” he said.
The onshore yuan rose modestly to 6.7104, still away from a 27-month high hit last week.
Offshore, the yuan traded at 6.7095 per dollar, with one-week yuan implied volatility hitting a more than five-year high as the U.S. elections neared.
Data due on Thursday includes U.S. third-quarter gross domestic product, which analysts expect to show record growth but not enough to make up for the pandemic impact.
The greenback firmed against the Japanese yen at 104.45 yen , having dropped to a more than one-month low on Wednesday.
The Bank of Japan on Thursday kept its monetary policy steady, while signalling that it has delivered enough stimulus for now. In the quarterly report, the BOJ trimmed its growth forecast but kept an upbeat outlook for a moderate recovery.
BOJ Governor Haruhiko Kuroda will hold a news conference later in the day to explain the decision.
The Aussie drifted away from its near one-week low of $0.7038 marked overnight. It last sat at $0.7064, supported by a more than 1% gain in U.S. stock futures.
Across the Tasman Sea, the kiwi edged higher against its U.S. counterpart, last up 0.18% to 0.6649. (Reporting by Eimi Yamamitsu; Editing by Sam Holmes)
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