EUR up on German spending bazooka, but here’s what’ll send it plunging again

Everyone wanted Europe on Wednesday, with Germany to relax its fiscal rules to unlock funds for increased military spending and to create an off-budget fund of 500 billion euros for infrastructure spending:

• ForexLive European FX news wrap: Euro stays upbeat as dollar slumps, DAX rebounds strongly
• Forexlive Americas FX news wrap 5 Mar: Tariff reprieve possible.EUR moves higher.USD lower

A note from MUFG sounds a note of caution:

• Trump is sounding “very aggressive” on future tariff action on the EU
• and thus, MUFG says they “are unconvinced that this move higher in the euro will extend much further”

Is the shift in fundamentals enough for EUR/USD to break through that extended band of range trade just to the left?

This article was written by Eamonn Sheridan at www.forexlive.com.