The euro has rallied this week after a landmark coronavirus relief fund proposed by France and Germany provided a 'meaningful positive surprise.'
provided a "meaningful positive surprise" to expectations for the common currency, according to Goldman Sachs.
It comes after Europe's two largest economies announced Monday that they would ask the European Commission, the executive branch of the European Union, to raise 500 billion euro in public markets, to be distributed to countries most impacted by the coronavirus pandemic. These spreads had been widening, but Goldman analysts anticipate that the Franco-German proposals will "short-circuit" that and bring spreads narrower. This relief rally in spreads implies that, should the proposal go through, these sovereign bonds are more likely to offer sufficient compensation relative to the risk.
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