Euro higher on Covid-19 recovery fund proposal

EUR

The euro edged higher yesterday following a report in Germany that the European Union plan to offer member states a €750bn coronavirus recovery fund.

The recovery fund is reported to include €500bn worth of grants with an additional €250bn to be offered as loans. Despite taking a huge step forward with this proposal, the European Commission are likely to face hefty opposition from Frugal states who argue that the issuance of grants sends the wrong signal by rewarding less financial sound states for financial mismanagement.

GBP

EU-UK trade talks have been an increasing focus during the month with time pressures mounting.

Rumours have circled this week that the EU is willing to make concessions on fishing rules at next week’s negotiations. Next week’s negotiations will be the final round before June’s key Summit and crucial in the overall process.

In comments on Tuesday, Bank of England (BoE) chief economist, Andy Haldane, stated that the bank was considering all options to support the economy. However the bank is not remotely close to any decision on taking interest rates below zero, this seemed to ease a bit of pressure from Sterling.

Key announcements

13:00 – EUR – Harmonized Index of Consumer Prices (YoY) (May)
13:30 – USD – Initial Jobless Claims
13:30 – USD – Gross Domestic Product Annualised (Q1)