Euro stalls but Fraco-German proposal gets positive reviews
EUR/USD up 17 pips to 1.0930
The euro has backed off from a session high of 1.0930 but there are some positive early takes on an effort from Germany and France to build a EUR500b recovery fund.
Here's what Goldman Sachs had to say:
Although it remains just a Franco-German proposal at an early stage of the process, we think that this proposal - which is likely to inﬂuence the upcoming EC proposal - is positive in three respects. First, the proposed amount is larger than the initial amount alluded to by EC President, Ursula von der Leyen after the last EU summit. Second, it suggested focusing on grants and not loans. Third, it proposed allocating ﬁnancial resources to the most affected sectors and the most vulnerable countries (hence based on the needs and independent of a country's size). Although the EU ﬁnance ministers will likely informally discuss this Franco-German proposal at their tomorrow's meeting, the ofﬁcial decision-making process on both the EU budget and the Recovery Fund will only start with the release of the EC proposal expected next week.