EUR/USD up by 0.2% as pandemic recovery money discussed

Justin Freeman
Euro and Dollar symbols in a circle of stars

The single European currency saw peaks and troughs in the foreign exchange markets as trading got underway on Monday.

The first dip for the currency came after something of a deadlock emerged at a summit between heads of government from across the bloc at the weekend.

The leaders met face to face in Brussels to discuss their fiscal responses to the coronavirus pandemic, and they managed to make some agreements.

Charles Michel, who serves as the chairman of the summit in his capacity as President of the European Council, did indicate that a significant amount of this would be delivered in grant format.

One news report even suggested that €390bn of cash could be packaged in this format.

However, the leaders appeared unable to confirm exactly how the cash would be distributed.

The summit was scheduled to conclude on Saturday, but it has since been extended further as leaders attempt to negotiate tricky waters around questions of whether or not the richer, northern countries in the bloc ought to essentially pay for recovery in the poorer nations.

The euro managed to scale some new highs at first.

It reached $1.1467 in its pair against the dollar at one stage when Michel made his announcement, putting it at its best position in almost 20 weeks.

However, it later went down in value – before then rebounding by a fifth of a percentage point.

It was spotted at $1.1446 after that.

According to analysts, the currency appears to be finding it difficult to break ahead of the crucial $1.1495 benchmark – which, if it managed to do so, would be a significant development.

While most attention was focused on Europe, some small movements did happen in other countries.

In Britain, for example, the pound managed to hold firm in its pair against the US dollar – reaching $1.2572 at one point.

In its pair against the single European currency, however, it was down – but only by the small amount of 0.1%.

Here, it managed to reach 91.05 pence.

The fact that the pound avoided significant declines, however, is a sign that the underlying market mood is one of optimism.

The British currency has taken a beating in recent months due to the ongoing troubles posed by Brexit and, in particular, the trade deal that the country must strike with the EU before the end of the year in order to avert significant knock-on economic effects.

Whether or not this optimism will be able to survive the outcome of negotiations between European leaders (as well as other economies currently debating stimulus packages), however, remains to be seen.

Monday afternoon looks set to be dominated by speeches from central bankers.

These will begin at 2:30pm BST when Philip Lane, who sits on the Executive Board of the European Central Bank, speaks.

In the UK, meanwhile, a speech from Andrew Haldane, who is the Chief Economist at the Bank of England, will take place at 3:10pm BST.

This will be swiftly followed by a speech from Silvana Tenreyro, who sits on the Bank of England’s Monetary Policy Committee.


Justin Freeman

Latest news

Forex vs Crypto: What’s Better For Beginner Traders?
The crypto and forex markets are two of the world’s most popular among investors and traders. Read more
Three Great Technical Analysis Tools for Forex Trading
You don’t have to be very technical minded to make use of technical analysis in your forex trading. Read more

Safest Forex Brokers 2024

Broker Info Best In Customer Satisfaction Score
#1 73% of retail CFD accounts lose money. Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
4.9
#2 Blackbull LogoYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
4.8
#3 AvaTrade LogoYour capital is at risk Founded: 2006 Globally regulated broker
Number One Broker
BEST CUSTOMER SUPPORT Visit broker
4.9
#4 plus500 logo81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Founded: 2008 Global CFD Provider
Number One Broker
Best Trading App Visit broker
5
#5 Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
4.9
#6 Forex Broker eToro Logo76% of CFD traders lose money Founded: 2007 Global CFD & FX Broker
Number One Broker
ALL-INCLUSIVE TRADING PLATFORM Visit broker
4.9
#7 XM LogoYour capital is at risk Founded: 2009, 2015 and 2017 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
5
#8 FxPro LogoYour capital is at risk Founded: 2006 CFD and Cryptocurrency Broker
Number One Broker
CFD and Cryptocurrency Visit broker

    Forex Fraud Certified Brokers

    BlackBull Logo Small
    FxPro logo
    plus500 logo
    eToro Logo
    XM Logo
    FXTM Logo
    AvaTrade logo
    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.