(15 MAY 2020)DAILY MARKET BRIEF 2:US dollar index consolidates above the 100

<p>In the foreign exchange markets, the US dollar index consolidates above the 100 mark on firm safe haven demand. The US treasury yields retreat as investors continue piling into less risky US debt, despite the uptick in equities – a proof that the risk appetite remains brittle.</p>
<p>The EURUSD extended losses to 1.0775 on Thursday and remained offered near the 1.08 mark in Asia. The strong US dollar and uncertainties regarding the European Central Bank’s (ECB) firepower weigh on the euro demand. Today, the Eurogroup meeting will lean on the progress over the second amendment adopted on 8 May 2020 to extend the scope of the state aid temporary framework, where countries will be given access to a credit line to finance their coronavirus-ballooned deficit. But the amount of lending remains quite limited, to maximum 2% of the member states’ GDP. So even a good progress on the fiscal leg may not replace the ECB support, if the bank finds its intervention capacity paralyzed by the German oppositio</p>