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The failure of Eurogroup to find fiscal cooperation could raise existential issues for EUR once COVID-19 crisis subsides even if a plateau in cases eases immediate EUR pressure, according to analysts at Westpac Institutional Bank.

Key quotes

“The current impasse over how to provide a blanket level of support will only inflame such potential rifts unless it can be broken quickly.”

“Despite the massive measures taken by global central banks, short term funding mechanisms continue to show strain into the Easter weekend.”

“If the EU fails to find a solution into next week, funding squeezes are likely to add on EUR strains and force a retest of recent EUR/USD lows (1.0635-50).”