Almost two months following the announcement of the EU recovery fund proposal EU leaders gather in Brussels for their first face-to-face summit in months.
The 27 leaders, all masked up, greeted each other with elbow bumps rather than their customary cheek kisses and handshakes.
The multi-billion-euro plan intends to breathe life into the EU economies since the coronavirus pandemic plunged the bloc into its latest crisis. With EU economies in free fall, the spectre of an autumn of deep economic malaise is raising its head. Further, the EU is already struggling with the protracted saga of Brexit.
The post-coronavirus economic recovery package fuels optimism for about the EU political future as the 27 member-states agree that a common response is needed. The Commission has backed a joint Franco-German motion.
Dutch opposition and a threat of a Hungarian veto weigh on the chances for a deal on the EU’s 2021-27 budget. The EU recovery summit will try to reach agreement on a recovery fund proposed by the Commission. The EU Commission has proposed a 1.1 trillion-euro ($1.25 trillion) budget plus the 750 billion euro recovery fund.
No outcome is expected at the summit until evening, at best. Officials said the summit could drag into Sunday if an agreement remains elusive. Many traders doubt the summit will reach agreement and EU leaders will need to meet again to find a compromise.
Either an agreement or a collapse in the talks will have a major impact on the currency when trading resumes. Implications for the euro should the EU go ahead with its plan would also be long-lasting.
On the trade war front, Washington had said it was considering banning Chinese Communist Party members travelling to the United States. The party totals more than 90 million people.
START TRADINGForex – EU recovery summit talks ahead
Fast charging currencies were left treading water on Friday, as an EU recovery summit in Brussels begin.
The dollar stood at 107.11 yen and 0.9410 Swiss franc, close to its highest since July 3.
The Australian dollar was last at $0.6985, up 0.2%. The Aussie is on track to clock its fourth consecutive weekly gain, up 0.5% so far.
The New Zealand dollar was last up 0.1% at $0.6546. The kiwi is down 0.3% so far this week, nearly reversing last week’s small rise.
The euro was heading for four-month highs on hopes a European Union summit will make progress on a recovery fund. The common currency was up 0.4% against the dollar, at $1.1425, near Wednesday’s $1.1452, its highest since March.
The single currency also made gains against the British pound, up 0.4% at 0.9102 pence.
The pound was set for its biggest weekly fall versus the dollar in a month. Uncertainty over Britain’s economy, Brexit talks and a high COVID-19 death toll weighed on the currency. The British currency fell on Friday and was set for its worst week in a month.
The pound is also the worst-performing G10 currency this week, down 0.6% against the dollar. At 1052 GMT, it was flat against the dollar at $1.2550. Against a stronger euro, it was down around 0.4% at 91.015 pence per euro.
In commodities trading, oil prices were little changed with Brent down 0.25% at $43.26 per barrel. U.S. crude down 0.15% at $40.87.
PLEASE NOTE The information above is not investment advice.