EUR/USD: Advances on the EU recovery fund to boost the common currency

EUR/USD has been under pressure, holding just above the 1.12 level, amid a mixed mood. Upcoming talks on the EU recovery fund can lift the shared currency on reports regarding progress to reach a deal, Yohay Elam, an analyst at FXStreet, informs.

Key quotes

“EU leaders hold a summit to discuss the European Commission's ambitious plan which including €500 billion in grants mutually funded. Reports about progress toward a deal may boost the euro while headlines talking about frictions risking it could weigh on the common currency. Markets expect the proposal, backed by Germany and France, to eventually go through.”

“Coronavirus concerns have somewhat waned. While Texas and Florida continue suffering from an increase in hospitalizations and cases, the pace has not materially accelerated. The US Sun Belt remains the epicenter while the greater New York area is returning to normal.”

“Washington is sending mixed messages on relations with China. While Trump touted the world's largest economies could decouple, other officials are satisfied with Beijing's fulfillment of Phase One of the trade deal. China somewhat soothed markets by announcing that it has the outbreak in its capital under control. Hopes for a vaccine and a study showing that a cheap steroid reduces mortality boosted the mood, yet doubts about the potential of herd immunity are a cause for concern.”