The euro falls back after a good performance in the Forex market. The progress in the discussions of the European Union have been positive, but some tension in the negotiations, have caused this retreat.
The European Union has reopened progressively its economy. And this has allowed for a positive behavior in the operations of the investors in the Forex market.
However, the doubt persists a little to cause the following steps to give on the part of the leaders of the Eurozone.
The euro reached a maximum of 4 months
The euro got a maximum of 19 weeks of $ 1.1467 on Monday. Supported by hopes that the European Union agreed a recovery fund of 750 billion euros.
This with the aim of helping to revive the economies of the EU. Economies affected by the pandemic, of which 390 thousand million euros could be offered as grants to the states of the Eurozone.
The leaders of the EU have made progress in the economic summit, in Brussels. After three days of talks on the financial arrangements and the measures to be taken to recover the economies hit by the blocks of the coronavirus.
However, disagreements on the composition of the recovery fund continue. Therefore, some leaders fear that this will directly affect their economies, further weakening the euro. Causing a contraction in the currency in the Forex market.
The sponsors of the fund was initially proposed 500 billion euro of grants and 250 billion of loans. Some countries are opposed to that in the grants.
Saw 350 billion euros as a maximum, but showed signs of commitment to keep in discussion the existence of grants and loans, since that is something that is needed by the european bloc.
The behavior of the european currency
The sustained efforts of the European Union to cope with the raw shock of a pandemic without comparison, have caused the trust in the euro is a constant in the Forex market.
As well, the analysts believe that the next level to watch the euro is $ 1.1495, which would take the currency to a maximum of a year and a half.
The euro collapses in the Forex market after achieving a maximum of 4 months. Source: Reuters
Analysts said that the smaller the amount of donations, and the more you complicate the negotiations on approving grants and loans, the part of the diplomats, most will drop the euro.
In addition, the european currency still needs to further factors of relevance to push above these levels. Since, the investors maintain their concerns before any future decisions of the EU.
“It is still right to believe that the market has not assessed fully the result of an agreement,” said Saimbi, and pointed out that, according to the index of the positioning of BNP, the money managers had a neutral position on the euro.
Price of the Euro at the time of writing
At the time of the writing of the article the european currency is traded in pair with the dollar $1.1438, recovering a little of his performance from last week. The euro falls back after a maximum of 4 months, but as the day progresses Monday, their numbers have been correcting their performance.
The euro collapses in the Forex market, but as the day progresses Monday, its performance picks up its pace. Source: Yahoo Finance
In summary, the analysts of the currency to expect that the performance of the euro will improve as the budget discussions in the EU, give positive results.
The economic openings of the eurozone countries are promising, and although there is an increase in the spread of the coronavirus, the figures are not particularly alarming.