Wednesday, January 27

German Cabinet approves draft budget for 2021, EUR96.2 billion in new debt

A German government official said on Wednesday, the Cabinet approved a draft budget for next year, as proposed by the Finance Minister Olaf Scholz.

The budget sets aside a net new debt of EUR96.2 billion euros or $112.43 billion to offer further financial support to cushion the impact of the coronavirus crisis.

Market reaction

The euro showed some signs of life on hopes of additional fiscal support from Germany, sending EUR/USD back on to the 1.1700 level.

The risk-on flows diminished the haven demand for the greenback, which also underpinned the spot’s recovery from two-month lows of 1.1672.

Credit: FX Street

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