- EU leaders’ summit looms, expectations are low for the EU Recovery Fund being agreed
- Eurozone consumer price index in focus
- US Dollar (USD) trades broadly lower versus peers on hopes of additional fiscal stimulus
- US Consumer confidence data in focus, it could start stalling as coronavirus numbers rise
The Euro US Dollar (EUR/USD) exchange rate trades flat after falling in the previous session. The pair settled on Thursday -0.25% at US$1.1384. At 06:15 UTC, EUR/USD trades just 2 points higher at US$1.1386.
The pair is on track to gain 0.7% across the week in what would be the fourth straight week of gains.
After the European Central Bank, as expected, adopted a wait and see mode with monetary policy, investors are turning their attention to the two-day EU leaders’ summit.
EU leaders will physically meet in Brussels on Friday to discuss the coronavirus recovery plan and a new long-term EU budget.
Vast differences remain between some EU nations with regards to the EU Recovery Fund, a fund which aims to help those countries worst bit by the coronavirus crisis. These happen to be the southern nations.
The Frugal Four, Sweden, Austria, Denmark and the Netherlands remain opposed to the plans, preferring a smaller fund based on loans rather than grants. Market expectations for an agreement are low. Even so, failure to agree could dent demand for the Euro at the start of the new week.
Eurozone consumer confidence is the only high impacting release. Analysts are forecasting a +0.3% increase month on month in June.
The US Dollar is under pressure as market participants are optimistic that US policymakers will provide further stimulus to the world’s largest economy as it attempts to bring its coronavirus outbreak under control.
US Congress is due to start debating such a rescue package next week as some states re-impose some lockdown measures.
The number of new daily coronavirus cases in the US reached a new record of 70,000 with Florida and Texas continuing to see sharp rises in both new cases and fatalities.
Investors will now look ahead to US consumer confidence data. Analysts are expecting a slight uptick in sentiment in July to 79, up from 78.1. Any weakness in the number could dent risk appetite and lift the US Dollar
