The Euro has taken strong strides to the upside, breaking down that big psychological 1.1000 price mark. It came following reports of details hitting the newswires of the EU Commission’s stimulus plan being leaked.
In terms of some of the initial proposal points that have been covered:
It suggests they are to mobilize some EUR 750 billion for the European recovery
Proposing issuing EUR 500 billion in grants
Italy to be allocated EUR 22.5 billion in grants
Greece to be allocated EUR 22.5 billion in grants
Spain to be allocated EUR 77.3 billion in grants
France to be allocated EUR 39 billion in grants
Germany to be allocated EUR 28.8 billion in grants
If ratified by all of the EU members, analysts have called this plan as a potential “game-changer” for EUR, as it would constitute an impressive show of EU unity that would likely stave off debt crisis concerns and rising anti-EU populist sentiment within the bloc for some time.
The European Commission was expected today to announce its plan to help the EU economy recover from its coronavirus slump with a mix of grants, loans and guarantees exceeding 1 trillion euros. Markets will be awaiting full official confirmation when European Commission President Ursula von der Leyen is expected to present a proposal for the EU recovery fund to the European Parliament later on Wednesday.
What does this mean for the markets?
It has helped EUR bulls push nicely to the upside, as a relief rally, much needed injection for the bloc, giving the damages of Covid-19. EUR/USD has been able to break above the psychological 1.1000 level to the upside. It has not been above this convincingly since the back-end of March.
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