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- EUR/USD: A convincing recovery plan is positive for the euro – Nordea
EUR/USD: A convincing recovery plan is positive for the euro – Nordea
FXStreet reports that according to Nordea, the EUR750 billion recovery fund proposal presented by the Commission would illustrate a strong commitment to keep the Euro-area and the EU together and support EUR assets.
“The European Commission proposed today a EUR750 billion package to support the recovery from the corona crisis, of which EUR500 billion would take the form of grants and EUR250 billion in loans.”
“Today’s proposal, if implemented, should decrease the risks regarding the future of the Euro-area. It is clearly beneficial for Italian bonds, but is negative for German bonds both via a higher credit risk component and via an improved economic outlook.”
“Given the number of open questions and the difficult negotiations ahead, there will most likely be market volatility ahead, as the market reassesses the prospects of a compromise.”
“Assuming an eventual compromise is found, without watering down today’s elements too much, it should support the euro and EUR assets in general in the medium-term.”
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