Euro jumps ahead of busy week; ECB, EU summit eyed

LONDON: The euro jumped sharply against the dollar on Monday, and is likely set for a bumpy ride over the next few days ahead of key developments in the European Union later this week.
EUR/USD rose 0.69%, to $1.1369.
The euro is likely to face a volatile week, ahead of the European Central Bank’s policy meeting on Thursday and an EU summit on Friday, ING said.
It widely expected that the European Central Bank will leave its key benchmark rate unchanged on Thursday, likely drawing added attention to ECB President Christine Lagarde’s speech, which could provide clues about future policy actions, ING added.
The ECB meeting, however, could be shadowed by Friday’s EU summit when the bloc’s leaders will debate the European Commission’s coronavirus recovery plan, which requires the backing of the EU’s 27 member states, making compromise difficult.
Ahead of Friday’s meeting, Germany and Italy have backed a compromise plan for EU’s €750 billion coronavirus recovery fund in an effort to appease bloc members who have voiced concerns over how to finance the stimulus.
The Netherlands, Sweden, Denmark, and Austria, known as the “frugal four,” have insisted that the funds should be released as loans rather than grants or subsidies.
The strong start to the week for the euro comes as data showed ongoing investor appetite for the single currency.
The value of euro net longs positions jumped to a two week high of around 103,600 contracts during the week ended on July 7, according to the U.S. Commodity Futures Trading Commission data released on Friday. That was up from 99,000 the prior week.