On Friday, the American currency had wrapped up the day sharply lower, while the bloc’s single currency had rounded off the day just a notch shy of its four-month peak, as delegates from the 27 European nations were debating over a €750 billion pandemic relief bill which might lift the eurozone out of the current recession.
In point of fact, although the leaders of European Union had been struggling to reach an agreement over the proposed €750 billion pandemic relief bill, the euro rose as much as 0.49 per cent to $1.144 on Friday over optimisms of a breakthrough aid package, just shy of Wednesday’s $1.145 against its American peer, the bloc’s common currency’s highest level since the pandemic-driven crash in mid-March.
Aside from that, from the American currency’s viewpoint, an intransigent rise in pandemic cases across the United States alongside reports of a raft of upbeat data from several parts of the world including the EU and China, appeared to have soured the safe-haven bid for the US Dollar.
A positive outcome on Sunday’s EU summit could push euro above $1.15, say analysts
Citing statistics, on Friday’s market closure, the US Dollar index (DXY) measured against a basket of six major currencies on an average fell by 0.36 per cent to 95.93, while the American currency had also faltered against the safe-haven Japanese Yen and Swiss Franc, demands of which usually surge during the turns of global-scale turmoil.
Apart from that, addressing to an unlikely progress in the EU Summit given the extent of difference of opinions between the EU leaders, a senior market analyst at Western Union Business Solutions, Joe Manimbo said on Saturday, “A positive outcome by the end of the EU summit Saturday could potentially be the euro’s ticket to fresh highs for the year.
Conversely, a disappointing outcome that merely kicks the fiscal can down the road would risk an unwinding of recent euro gains. A deal would make the euro more attractive as a reserve currency,” adding that even a hint of progress would help the bloc’s common currency to break above its technical resistance level of $1.15, a level which had not been seen since February 2019.