Euro Higher As EU Summit Begins
The euro strengthened against its major opponents in the European session on Friday, as European Union leaders meet to agree on a ?750 billion rescue package to support economic growth amid Covid-19.
EU leaders hold a 2-day summit in Brussels to hammer out details of European Recovery Fund in response to the crisis.
The current proposal is for an EU recovery fund consisting of ?500 billion of grants and ?250 billion of loans to help the weakest members of the bloc.
The recovery plan faces opposition from several “frugal” Northern European countries, led by the Netherlands.
Germany and France are pushing for a deal based on common borrowing to fund grants for the hardest-hit economies.
EU leaders also need to agree on a seven-year budget worth ?1.07 trillion.
European Central Bank President Christine Lagarde urged the EU27 to act quickly on the “ambitious package” given uncertain economic outlook.
In economic releases, Eurozone inflation increased as initially estimated in June as many coronavirus containment measures have been gradually lifted, final data from Eurostat showed.
Inflation rose to 0.3 percent from a near-four year low of 0.1 percent logged in May. The rate came in line with the preliminary estimate.
The euro rose to 1.1425 against the greenback, from yesterday’s closing quote of 1.1384. Next near term resistance for the euro is likely seen around the 1.17 level.
The euro was up against the yen, at 122.42. At yesterday’s close, the pair was trading at 122.08. On the upside, resistance is seen near the 124.00 level.
The euro approached 0.9108 against the pound, marking a 3-day high. The euro is likely to face resistance around the 0.92 region, if it gains again.
The single currency appreciated to a 3-day high of 1.6353 against the aussie, 2-day highs of 1.7451 against the kiwi and 1.5516 against the loonie, up from yesterday’s closing values of 1.6328, 1.7419 and 1.5452, respectively. The next possible resistance for the euro is seen around 1.65 against the aussie, 1.76 against the kiwi and 1.59 against the loonie.
In contrast, the euro pulled back to 1.0748 against the franc, from a high of 1.0769 it recorded at 8:00 pm ET. The euro is seen finding support around the 1.03 region.
Looking ahead, Canada wholesale sales for May, U.S. housing starts and building permits for June and University of Michigan’s preliminary consumer sentiment index for July are scheduled for release in the New York session.