NEW YORK: The euro rose against the dollar to just under four-month highs on Friday, following the kick-off of a European Union summit that market participants hope will advance a recovery fund that would help lift the EU out of recession.
No outcome is expected at the summit until Friday evening at the earliest, but an agreement or a collapse in the talks would have a major impact on the currency when trading resumes.
The euro was up 0.38% against the dollar, at $1.143, near Wednesday's top of $1.145, its highest since the coronavirus financial crash in March. "The euro favored four-month highs on hopes that Europe's fiscal leaders would move toward agreement on a massive 750 billion-euro rescue fund. A positive outcome by the end of the EU summit Saturday could potentially be the euro's ticket to fresh highs for the year," said Joe Manimbo, senior market analyst at Western Union Business Solutions.
The euro could break through the technically significant $1.15 level - which hasn't been touched since February 2019 - if progress is made. The pound is on track to be the worst-performing G10 currency this week, after weaker economic data raised concerns over the possibility the Bank of England will introduce negative interest rates.
For the week, the dollar was on course for gains against sterling, the yen and the Swiss franc. The dollar index, which heavily weights the euro, was last 0.25% lower at 96.037.
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