Euro fluctuated on Friday as EU meeting disappointed traders

The Euro fluctuated on Friday. It fell by 0.4% against the U.S. dollar to a one-month low at $1.07275. Furthermore, the currency dropped to a three-year low against the Japanese yen at 115.55 yen. While the Euro recovered shortly and edged into positive territory in late trading, traders remain cautious.

The Euro’s struggles are mostly influenced by the EU leaders meeting, which took place on Thursday.

While EU leaders agree to fund recovery from the coronavirus pandemic, differences continued among EU governments. According to French President Emmanuel Macron, they argued whether the fund should be transferring grant money, or merely making loans to help businesses.

The authorities just delivered on the basics and fell short of surprising markets positively – stated Ilan Solot, a currency markets strategist at Brown Brothers Harriman in London. He thinks that that is weighing on the Euro.

Meanwhile, Ulrich Leuchtmann, head of FX strategy at Commerzbank, noted that the outcome of the EU meeting reflected the disagreement about how to resolve the crisis in Europe, as well as prevent an escalation in peripheral bond yields.

It seems that old disputes resurfaced across the EU while Italy and Spain experienced a much harder hit from the coronavirus pandemic than Germany. Investors are nervous due to this uncertainty.

What about the U.S. dollar?

The dollar’s four-day rally ended on Friday, but concerns about the Euro still keep the currency afloat. During the last few days, the greenback has seen its biggest weekly rise since early April. The historic collapse in oil prices partly caused such success. However, the dollar’s safe-haven appeal receded as oil prices stabilized.

According to analysts, any global recovery will probably be slow and patchy. Traders are waiting for preliminary data on orders for goods in the United States, as well as a German business sentiment survey. Both of these are due later on Friday, but they likely won’t improve investors’ mood.

Meanwhile, several Asian currencies lowered as well. The Aussie and Kiwi each fell by about 0.2%. The Kiwi traded below 60 cents at $0.5996, while the Aussie dropped to $0.6359.