As many countries come back to the new mainstream steadily lifting prohibitions, there is no agreement on the recovery of the eurozone fund. The EUR/USD rate has escalated from 1.08 last March to around 1.12 nowadays showing signs of improvement for the euro. In the next months, though, there is the need for a compromise regarding the terms and conditions that will lead the way for the EU recovery fund.
Last Friday, political leaders of the eurozone did not manage to agree to the recovery. On the bright side, there was no clear evidence of a lack of support for a readjustment plan. In the meantime, the euro is escalating due to the focus on fiscal policies rather than monetary restrictions. The next meeting due July will keep expectations high regarding the evolution of the EUR-to-USD ratio.
Safe Havens Backing up USD
The euro strength is no easy feat to accomplish in the post-corona market provided that the USD is backed globally. Most financial operations take place in USD while other currencies attempt to reach safe-haven status fade. In times of crisis, people move by fear, so they seek to gather more robust assets, which favors USD in most cases. However, the situation may not remain as positive for the euro in the long term.
When the US economy secures its way to economic post-pandemic recovery, the tables may turn for currencies on a Bullish stance these days. In a nutshell, this is the moment for currencies like JPY, GBP, CNY, and so on to position strongly before USD regains momentum. The euro is in a golden spot to propel itself to a stronger place within the next months as expectations remain high until the reach of an agreement to outline the fund recovery.