The euro rose to its highest since October 2018 against the dollar as the European Union’s agreement on stimulus spurred renewed demand for the region’s assets.
The currency advanced as much as 0.5% to 1.1584 as of 7:35 a.m. in New York as traders absorbed the impact of the accord, which allocates 750 billion euros ($860 billion) to pull European economies out of the worst recession in memory, and tightens the financial bonds that hold the 27 nations together.
The shared currency “is clearly celebrating the improvement in its fundamentals,” said Analyst“The size of the recovery fund is not huge and would likely be insufficient if another wave of lockdowns hit the continent. However, the fact that the EU were able to coordinate a compromise earlier than many had anticipated is significant.”
The region’s assets have rallied in response. Germany’s DAX Index is now almost positive for the year and the Stoxx Europe 600 Index has added $3.5 trillion in market value since the mid-March lows.