The Euro Jumps Higher on German Fiscal Spending Rumours
EUR/USD has just jumped higher after rumours of a fiscal stimulus programme from the government
A few days ago we heard rumours about Germany starting a fiscal stimulus programme which would aim to tackle the economic slowdown and climate change, as if northern Europe wasn’t the region with the smallest carbon emission already.
Anyway, those rumours have surfaced once again today. According to report from Der Spiegel, the German government is getting prepared for deficit spending in case of a recession. Germany has a big surplus so i don’t know if that’s called deficit spending, but the idea is the same. It means that cash will be pumped out from the government on infrastructure and other things.
This is a good sign for the Euro since it would mean that help is on the way for Germany and the Eurozone, at a moment that the manufacturing sector in Germany is in a deep recession and which might spill to other sectors of the economy such as services. The Euro jumped around 50 pips after those comments but it is now slipping back lower.
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