© Reuters.

By Yasin Ebrahim 

Invesing.com – The euro held the bulk of its gains against the dollar on Monday as France and Germany proposed a $500 billion coronavirus relief program to support an economic recovery in the EU.

jumped rose 0.98% to $1.0915, just shy of its session high of $1.0921.

The funds to support the proposed stimulus programe would be raised by the European Commission through bonds.  

The move marked a major step forward toward the creation of coronavirus bond program, or coronabonds, though both France and Germany conceded that work was still needed to still needed “to bring together all the member states.”

Several member states, including the Netherlands and Denmark, have previously expressed resistance against the coronabonds on fears that payment of the debt would be not evenly distributed.

The update comes amid investor hopes for the further European Central Bank stimulus following the central bank’s recent efforts to shore up the economy.

“We’ve seen further effective policy easing across Europe over recent days with the ECB stepping up the pace of its PEPP bond purchases, Italy announcing it has finally agreed a €55bn package of fiscal measures and in the UK the Chancellor extending the job retention scheme,” Nomura said.  “And there’s more to come – we continue to wait for a European recovery fund, and see both the ECB and BoE announcing more asset purchases in June.”

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