Forex – Euro Buoyed by Recovery Fund Plan

© Reuters.

By Peter Nurse

Investing.com – The euro has continued to show strength in early European trade Thursday,  as traders continue to upside in the single currency following the announcement of a hefty plan to prop up the bloc’s virus-hit economies.

At 3:05 AM ET (0705 GMT), traded 0.1% higher at 1.1013, remaining above the 1.10 level, after earlier rising to an eight-week peak of $1.1035. 

This follows the EU Commission announcing its plan for a European recovery fund Wednesday, with the proposal exceeding market expectations as it envisages 250 billion euros in loans on top of the 500 billion euros in grants, which were originally proposed by France and Germany last week.

The blueprint, if ratified by all, would be a step towards mutualized debt as a major funding tool for the first time, paving the way for greater EU powers of taxation.

“Overall, we believe the recovery fund proposal is a strong signal from the Commission and European leaders (if confirmed) of support for the European project,” said analysts at Danske Bank, in a note to clients.

Elsewhere, the , which tracks the greenback against a basket of six other currencies, stood at 98.828, down 0.2%, while rose 0.1% to 107.84.

Losses to the safe-haven greenback came despite tensions between China and the U.S. being stretched even more, after Secretary of State Mike Pompeo said that the Trump administration could no longer certify Hong Kong’s political autonomy from China under the new national security law. 

This could open the door to options including visa restrictions, asset freezes and potential tariffs.

That said, U.S. business groups have urged President Donald Trump to go slowly in responding to Beijing’s planned imposition of new national security laws on Hong Kong.

At 3:05 AM ET, the yuan, often seen as a barometer of relations between the world’s two biggest economies, gained 0.2% to 7.1556 per dollar.

Another currency showing strength Thursday is sterling, after the U.K. government announced plans late Wednesday for its test and trace system to combat the coronavirus outbreak. 

The aim of the system is to lift national lockdown restrictions and move towards more localised, targeted measures.

At 03:05, rose 0.2% to 1.2270.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Forex – Euro Buoyed by Recovery Fund Plan

Spread the love
 

Related Articles

Leave a Reply

Our website uses cookies and thereby collects information about your visit to improve our website (by analyzing), show you Social Media content and relevant advertisements. Please see our cookies page for furher details or agree by clicking the 'Accept' button.

blank