The Euro has been rallying over the past couple of days which has been driven by various factors but predominantly by the proposal of a European recovery fund.

The EU have proposed an ambitious plan to help support the European economies most affected by the impact of Covid-19. This package includes around 500 billion euros of grants (plus an extra 250 billion in loans) and may help kickstart their economic recovery. Although the deal is yet to be signed off, the backing of Germany and France should be sufficient to get the deal over the line. This is supporting the Euro as it’s an encouraging sign of unity within the Bloc and the funds should really help the region’s economy rebound better than most.

As a result, the GBP/EUR has slipped to a 2-month low this morning having lost nearly a cent from yesterday. The EUR/USD has also pushed to a 2-month high having moved over 2% higher this week.

President Trump is set to deliver a speech later on today in which he’s expected to announce some retaliatory measures on China after they passed a new security law which tightens their grip on Hong Kong. Markets are waiting to see how strong these measures will be; whether they’ll be more token actions or severer steps relating to trade. Any strong measures could see a reversal of risk sentiment which could see the dollar back in favour again (thereby slowing the Euro rally).