The euro rose to its highest level since early 2019 against the dollar on Tuesday, benefiting from the approval by European leaders of a historic stimulus plan to deal with the impact of the coronavirus.
Around 7:00 p.m. GMT (9:00 p.m. in Paris), the euro gained 0.72% against the greenback, at $ 1.1530. It rose to $ 1.1540 during the session, a level more seen for a year and a half.
The leaders of the 27 concluded Tuesday at the end of a marathon summit a historic agreement on a post-coronavirus recovery plan in the amount of 750 billion euros, based for the first time on the idea of a common debt.
This sum is made up of 390 billion euros in grants, allocated to the states most affected by the pandemic and 360 billion for loans, repayable by the requesting country.
The issue of common debt is based on a Franco-German proposal, which aroused fierce opposition from the four so-called “frugal” countries (the Netherlands, Austria, Denmark, Sweden), then joined by Finland.
Although expected, the deal has helped to shed light on the immediate future for the eurozone economy. The strong signal of continental unity has galvanized confidence in the long-term prospects of the euro area. euro, “notes Joe Manimbo of Western Union.
For Boris Schlossberg of BK Asset Management, this plan should benefit the single European currency “unless sabotage by the European Parliament, which has extensive budgetary powers.”
“With the pandemic being much better controlled in the EU than in the United States, Europe could even immediately benefit from a competitive advantage, with its industry and services likely to restart thanks to the support measures while the United States continues to fight the virus in key states for the economy such as Texas, California and Florida “, adds the expert.