EUR / USD up 17 pips to 1.0930
The euro has retreated from a trading high of 1.0930, but there are positive beginnings on an effort by Germany and France to build a recovery fund of 500 billion euros.
Here’s what Goldman Sachs had to say:
Although this is only a Franco-German proposal at an early stage in the process, we believe that this proposal – which is likely to influence the next EC proposal – is positive in three respects. Firstly, the amount proposed is higher than the initial amount to which the President of the EC, Ursula von der Leyen, alluded after the last EU summit. Second, he suggested focusing on grants, not loans. Third, he proposed to allocate financial resources to the most affected sectors and to the most vulnerable countries (therefore according to needs and regardless of the size of a country). Although EU finance ministers will likely informally discuss this Franco-German proposal at their meeting tomorrow, the formal decision-making process for both the EU budget and the Recovery Fund will only start ‘with the publication of the EC proposal scheduled for next week.