By Yasin Ebrahim – The EUR appeared poised for a four-day winning streak on Thursday after the European Central Bank left its monetary policy unchanged, but the single currency could face a tough weekend as the EU prepares to discuss the €750 billion recovery plan.

fell 0.25% to $1.1381.

The European Central Bank has kept the rate of its main refinancing operations at 0 per cent and has committed to implement additional stimulus measures if the economic recovery in the euro area slows significantly.

The ECB governor continued to call for budgetary support on the eve of the two-day European summit, where EU leaders will discuss the European Commission’s proposals for a €750 billion stimulus package to help some of the most affected members of the Economic Union.

“It is important that EU leaders agree quickly on an ambitious package,” Lagarde said.

However, few people are betting that this recovery plan, which requires the support of all 27 EU Member States, will be ratified, as members disagree on how it should be financed.

The Netherlands, Sweden, Denmark and Austria, known as the “four frugals”, have insisted that funds should be made available in the form of loans rather than grants or subsidies.

“After failing to reach agreement on the details during their 19 June videoconference, the first face-to-face summit of leaders since the start of the pandemic may again fail to reach an agreement, despite new compromise proposals issued last week by EU President Charles Michel,” said Daiwa Capital Markets.

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