EUR/USD dropped below 1.09 despite Germany passing a new €546 billion fund for defense and infrastructure spending.
The success of Friedrich Merz’s project paves the way for further easing of Germany’s strict fiscal policy rules. After reaching a compromise with the German Greens, the bill was supported by 513 out of 733 Bundestag members, securing the required two-thirds majority to amend the constitution. The legislation will exempt defense spending from budgetary restrictions, allowing Germany to significantly boost its military capabilities.
However, the event is overshadowed by uncertainty surrounding the ongoing Trump-Putin talks. Bloomberg, citing sources “close to the matter,” reports that Vladimir Putin is demanding a halt to arms supplies to Ukraine. The suspension of U.S. aid is said to be a prerequisite for the Russian president to agree to a 30-day ceasefire.
Source: xStation5
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