German- and French-led plans for a 500 billion euro EU coronavirus recovery fund and EU Commission recovery fund idea will be presented next week.
The European Commission will not copy and paste a Franco-German proposal when it presents its own recovery fund idea next week. European Commission’s proposal would include a mix of grants and loans, rather than just grants as suggested by Paris and Berlin.
Paris and Berlin, whose agreements usually pave the way for broader EU deals, proposed a 500 billion euro Recovery Fund. This Fund will offer grants to EU regions and sectors hit hardest by the pandemic, without driving up their debt levels.
Germany and France proposed that the European Commission borrow the 500 billion euros on behalf of the whole EU. The commission is expected to outline their proposal for the fund before a European Summit scheduled for May 27.
Further, a resolution on the need to investigate the global response to the pandemic won endorsement at the WHO’s annual ministerial meeting. None of the WHO’s 194 member states – including the United States – raised objections to the resolution brought by the EU.
China said the United States was trying to shift the blame for Washington’s own mishandling of the COVID-19 crisis. This was a response to President Trump’s letter threatening to halt funding to the World Health Organization.
START TRADINGForex – EU recovery fund on the table
With governments scaling back lockdown restrictions, investors grew optimistic that economies could soon return to normal. But some concern remains because the outbreak is not under control.
The US dollar lost its safe-haven appeal after encouraging results from the trial of Moderna’s vaccine boosted riskier assets. The greenback was down 0.2% against a basket of currencies at 99.42, having touched a two-week low of 99.22 earlier.
Trade-sensitive currencies such as the Australian dollar rose to a three-week high of 0.6564. The New Zealand dollar was last up 0.7% at 0.6081.
The euro rallied on Tuesday, propelled by a Franco-German proposal on Monday for an EU recovery fund. The common currency last bought $1.0952 after rising to a two-week high of $1.0976 earlier.
The euro was 0.3% higher versus the Swiss franc at 1.0633, after rallying to an 11-week high the day before.
Britain’s pound shrugged off the UK’s highest unemployment claims figures in nearly a quarter of a century. Further, a near 80% plunge in European new car sales in April contributed to 1.8% fall in auto sector shares.
The sterling had hit a seven-week low against the euro at 89.60 pence, but strengthened to as much as 89.19 pence. Against the dollar, the pound hit a low of $1.2185 around 0320 GMT. It was last at $1.2231.
In the commodity markets, profit-taking saw Brent prune gains. The rally looked broadly intact amid signs that producers will stick to plans to cut output when global demand picks up.
Brent stood at $35.10 a barrel, more than double where it was in mid-April. U.S. crude was at $32.70 a month on from its collapse into negative territory.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money