The European Union's recovery fund proposal has been dubbed the "Make Europe Great Again" fiscal spending package by analysts at BofA, who said that it was the best shot at ending the region's equity bear market and reversing the U.S. dollar's rally.

BofA said the "Make America Great Again" policy pushed by U.S. President Donald Trump to boost the American economy had supported the dollar until now, and "Make Europe Great Again", or "MEGA", is now likely to help the euro.

The European Commmission on Wednesday proposed to offer 500 billion euros in grants and 250 billion euros in loans in a recovery fund for the region's coronavirus-hit economies.

The news triggered a rally in the euro, in European equities and in southern European bonds. The euro has now jumped 1.8% against the dollar this week to its highest levels since late March.

BofA's weekly analysis of fund flow data flagged up a $12.8 billion move into investment grade credit funds and $6.9 billion flows into high-yield credit.

Equities saw $3.8 billion in outflows while emerging markets continued to bleed cash, losing another $1.6 billion, but it was the market's smallest outflow in six weeks.

Crunching numbers to scale the impact of the virus on the world economy, BofA noted that global GDP had seen $10 trillion in losses, policy stimulus so far has totalled $18 trillion and there have been 122 interest rate cuts globally.

(Reporting by Thyagaraju Adinarayan; Editing by Tommy Wilkes)