After the European Union agreed to a recovery fund worth 750 billion euros
Last updated: Tuesday July 21, 2020 KSA 21:05 – GMT 18:05
Posted on: Tuesday July 21, 2020 KSA 20:45 – GMT 17:45
Source: New York, London – Reuters
The euro rose on Tuesday to its highest level against the dollar since January last year after European Union countries signed an agreement on a massive stimulus plan to revitalize their economies hard hit by the Corona virus pandemic.
Encouraging results from several vaccine trials for Covid-19 also boosted market sentiment and led to the rise of global stock markets.
The euro rose 0.63% against the US currency to $ 1.1516 in late trading, its highest level since January 11, 2019.
The dollar fell 0.62% against a basket of major currencies to 95.141, the lowest level since early March.
The Australian dollar gained 1.58% to $ 0.7124, as it also supported after the central bank offered few surprises in the minutes of its meeting last month.
The New Zealand dollar rose 0.94% to $ 0.6637. The Canadian dollar increased 0.72% to 1.3436 Canadian dollars to the US dollar.
Against the Japanese currency, the US dollar fell 0.5% to 106.72 yen.
The European stock market hit its highest level in four months on Tuesday, and the German DAX index erased almost all of its losses for the year after European Union leaders agreed on a huge stimulus package.
The pan-European STOXX 600 index jumped as much as 1.3% before finishing the session, rising 0.3% at its highest level since early March, which was also done by the euro zone stocks index, which rose 0.5%.
Oil stocks gave the European index the biggest boost, with their best performance since early March thanks to a jump in crude prices.
Global sentiment also improved with growing optimism about a treatment for Covid-19 disease after promising preliminary data from trials of three possible vaccines.
European Union leaders reached a landmark agreement in the early hours of Tuesday on a 750 billion euro ($ 856 billion) recovery fund and a 1.1 billion trillion long-term bloc budget that they hope will help lift the continent from the deepest recession since World War Two.
The German DAX index closed 1% higher at the highest level in five months, supported by gains for technology giant SAP.
And the stock indices in Spain and Italy, two countries in southern Europe that are expected to benefit from the European Union agreement, rose 0.2% and 0.5%, respectively.
The benchmark Financial Times index closed on the London Stock Exchange stable with shares of mining giant (BHP) 2.6% after the company warned of risks to demand.
An index measuring the volatility in the European stock market fell to its lowest level since February 25.