EUR/USD Gains as Markets Buoyed by Reports About Recovery Fund
Arslan Butt • 1 min read
The Euro is trading strong against the US dollar on Wednesday, holding on to its recent gains in hopes for the creation of a recovery fund pitched by France and Germany earlier this week. At the time of writing, EUR/USD is trading around 1.094.
Buoyed by news about the possibility of a 500 billion euro recovery fund that could assist the worst affected economies in the Eurozone, traders have closed their short positions on EUR/USD, helping this forex pair edge higher. Not only did France and Germany propose the creation of this recovery fund, but also pitched an idea to permit borrowing by the European Commission on behalf of EU as a whole.
After several weeks of uncertainty about the fate of the EU nations amid opposition for fiscal stimulus measures by the wealthier members, this news offers huge relief and reassures investors about the unity of the EU member nations in fighting against the coronavirus pandemic and its resulting economic fallout.
EUR/USD also received a boost in the previous session following the release of the German investor sentiment. The investor sentiment index posted a greater than expected rebound during May as worries about the pandemic eased and countries got ready to reopen their economies.