The Euro advanced further on Friday to close in New York at 1.1427, a gain of 0.23%. The shared currency continued to grind its way higher against the US Dollar. The stark contrast between Europe’s efforts to contain the coronavirus with that of the United States has started to impact the economies. The yield gap between US and German key 10-year treasuries in a month has narrowed by 10 basis points.
This morning’s report of a delay by the European Union in agreeing a coronavirus recovery fund will weigh on the shared currency. The disagreement stems from a breakdown in the funding between grants and loans. The more conservative members prefer more loans than grants while the others want it the other way around. There is a possibility, according to diplomats (from a Reuters report) that the members would abandon the summit and try again for an agreement next month. ECB President Christine Lagarde said that it would be better for the leaders to agree an “ambitious” package than to have a quick deal at any cost.
EUR/USD opens in Asia a few points lower at 1.1419. Immediate resistance can be found at 1.1440 followed by 1.1470. Immediate support lies at 1.1400, 1.1370 and 1.1340. Look for the shared currency to drift lower with a likely range today of 1.1340-1.1440. Prefer to sell rallies.