EUR/USD: Germany and the Netherlands reluctant to coronabonds – MUFG
The euro has outperformed during the Asian trading session with EUR/USD rising back above the 1.0900-level and further above the intra-day low of 1.0636 set on the 23rd March, Lee Hardman, a currency analyst at MUFG Bank, briefs.
“The euro appears to be gaining support from building evidence of a shift towards a more co-ordinated and unified response by European policymakers to combat the negative COVID-19 shock to the euro-zone economy.”
“France, Italy, Spain and six other euro area governments have called for the issuance of joint European debt to help finance economic support measures. They have put forward the case for so-called ‘corona bonds’ ahead of today’s scheduled video conference between EU Leaders.”
“Bloomberg also reported yesterday that ECB policymakers are open to activating their Outright Monetary Transactions (OMT) programme. The advantage of using the OMT would be that it is not bound by the limits of the ECB’s existing bond-buying operations.”
“The developments are helping to reduce the risk of another negative euro-zone debt crisis shock for the euro-zone economy and the euro.”