The European Central Bank (ECB) is likely to attach some loose conditions to a potential scheme designed to cap borrowing costs for the eurozone's most indebted states in a bid to avoid fragmentation risks, Reuters reported, citing sources.

Key takeaways

“The scheme would likely have conditions, such as that countries comply with the European Commission's economic recommendations.”

“The ECB will spell out that the scheme's goal is simply to keep bond spreads in line with their economic fundamentals, rather than bringing them to near-zero like they were before a crisis of confidence a decade ago.”

Market reaction

EUR/USD holds steady below 1.0450 on these above headlines, mainly at the mercy of the dollar dynamics.