Monex: EUR/USD stijgt op hoop op Amerikaans stimuleringspakket

Monex: EUR/USD stijgt op hoop op Amerikaans stimuleringspakket

9 december 2020

Valuta
valuta 3

Hieronder volgt een kort commentaar in het Engels van Ranko Berich, Head of Research bij Monex Europe op de Amerikaanse dollar, euro en het Britse pond.

EUR
Currency markets took the US stimulus proposal as a sign of risk being back on the agenda, and the euro gained vs CHF, USD and JPY over a 1-day period while it traded softer against all other G10 currencies. Polish Prime Minister Mateusz Morawiecki hosted Hungary’s PM Viktor Orban yesterday to discuss a solution to the standoff over the EU recovery package and budget worth $2.2trn in funds. The two hold-outs have been discussing a compromise that would see the EU clarify the rule-of-law mechanism in detail, including unanimous consent from the 27 members. Officials familiar with the discussions stated that the two nations are close to reaching an agreement with the EU to lift their vetoes, while PM Viktor Orban even stated there is a good chance Hungary and Poland will agree with the EU on passing the spending package this week. While this would be mildly positive for EUR and more so for PLN and HUF, the downside risk remains: if the EU and the two nations fail to agree on the rule of law conditions, this will lead to a delay of the stimulus package and possibly other summits to come. The balance of risks for the euro is skewed to the downside. Any last minute backtracking will likely weigh on the euro as negotiators will then need to navigate a fresh path for the recovery fund. With markets not yet fully believing the story of a collapse of the recovery fund, upside price action in the case of a deal is likely to be smaller. 

USD
The dollar’s decline had stabilised somewhat over the last few trading sessions as states tighten lockdown measures and fiscal stimulus discussion continue to remain in limbo. However, overnight Treasury Secretary Steven Mnuchin gave House Speaker Nancy Pelosi a new $916bn Covid-19 relief proposal, which extended the greenback’s declines. The proposal is far more narrow than the pre-election proposals by the Democrats, but marks the first move from the White House after the election to break the stalemate. With the government set to run out of funding and shutdown by the end of the week, the clock is winding down rapidly for a relief package to be passed, and with it, a government spending bill. Both houses are likely to vote for a week extension by passing a stop-gap proposal, allowing the legislature to continue functioning for another 7-days, but the emphasis remains on passing a spending bill along with a pandemic relief package. The news that Mnuchin has offered the Democrats a proposal is a step in the right direction, however, it is unlikely that the proposal will meet all of the opposition's demands with respect to its details. Negotiations are likely to continue right down to the wire if the last few months are anything to go by, but markets are enjoying the boost to risk appetite that Mnuchin's proposal garnered. 

GBP
Sterling’s near-term prospects seem to be heavily tied to the outcome of a dinner between Boris Johnson and Ursula von der Leyen tonight after the pound made back some of this week’s losses yesterday and overnight. Talks between EU and UK negotiating parties seem to have reached the end of the line for now, with political compromise now necessary to move things forward. Chief EU negotiator Michel Barnier was unusually pessimistic about the chances of success in comments yesterday, saying they were now “very slim” despite a reported breakthrough in separate talks over the UK adhering to last year’s Northern Ireland protocol. Boris Johnson will head to Brussels tonight for a dinner discussion with Ursula von der Leyen, although both sides appear to be playing down the chances of a political intervention leading to a breakthrough in talks.

Gerelateerde berichten