Lagarde speech: Franco-German EU recovery fund plan is welcome

Responding to the French-German EU recovery fund proposal on Monday, European Central Bank (ECB) President Christine Lagarde welcomed the news in a joint interview with four European newspapers.

Key quotes

“The Franco-German proposals are ambitious, targeted and, of course, welcome.” 

“They pave the way for the European Commission to borrow funds over the long term and, above all, they allow a substantial amount of direct support to be provided to the countries most affected by the crisis.” 

After two months of impending talks, France and German, finally, proposed for a 500 billion-euro ($546 billion) coronavirus recovery fund to help cushion the economic blow from the virus impact.

Market reaction

On the announcement of the plan, EUR/USD jumped to two-week highs of 1.0927.

At the press time, the spot trades on the back foot just above the 1.09 handle, suffering from broad US dollar rebound amid rising US-China tensions.