Category Archives: Euro

ECB cuts rates for third time this year as Europe braces for Trump tariffs

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Quarter-point cut in main rate to 2.25% aimed at tackling slowdown in eurozone growth and impact of US border taxes

The cost of borrowing has fallen across the 20-member euro area for the third time this year after the European Central Bank cut its main interest rate to 2.25% in response to slowing growth and Donald Trump’s tariffs.

The Frankfurt-based bank cut its benchmark deposit rate by a quarter of a percentage point on Thursday, in line with economist expectations, to tackle a slowdown in the bloc and the impact from the border taxes imposed earlier this month on all EU imports into the US.

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European markets soar as Germany moves to lift ‘debt brake’ and raise defence spending

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Berlin’s ‘big bazooka’ proposal sends industrial stocks surging but fiscal sea change also hikes borrowing costs

European financial markets have rallied sharply and German borrowing costs have soared after the country’s prospective leaders announced a historic deal to loosen its “debt brake” rule to boost spending on defence.

The yield – in effect the interest rate – on 30-year German government bonds rose by about 25 basis points to 3.08% in its biggest daily increase since October 1998.

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Beethoven and Marie Curie compete with birds to appear on new euro notes

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European Central Bank picks two themes for redesign submissions: ‘iconic personalities’ or rivers and birds

He was a master of notes, and now the German composer Ludwig van Beethoven could be one of the faces of the redesigned euro, the first time the EU currency’s banknotes have been revamped.

In a process that started in 2021 and has already involved a public inquiry and two multidisciplinary advisory groups, the European Central Bank (ECB) has selected two themes for the redesign.

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European Central Bank cuts interest rates to support growth as eurozone economy stagnates – as it happened

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Live coverage of business, economics and financial news as ECB cuts main interest rate by 0.25 percentage points in effort to support European economies

It was a flash reading on the Eurozone economy, so we don’t have the details on what the drivers were. But it’s clear that it was a weak end to 2024.

But the European Central Bank might be able to spur a bit of economic growth in the eurozone with looser monetary policy.

This marks a weak end to last year, following positive growth in the first three quarters of 2024. As a result, first estimates suggest that the currency bloc as a whole grew by 0.7% in 2024. Declining activity in Germany – the Eurozone’s largest economy – has weighed on the bloc’s growth, with German GDP contracting by 0.2% on the quarter. This suggests Germany has now seen annual declines in activity for two consecutive years.

In 2025, further loosening of monetary conditions is expected to provide a modest uptick in activity for both Germany and the Eurozone, with growth expected to amount to 0.3% and 1.0% respectively.

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Wall Street and bitcoin soar to record highs as Trump wins US election

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Dollar up and renewable energy stocks down, while shares in president-elect’s media business rise by more than a third

Wall Street and bitcoin rallied to fresh record highs and the dollar soared after Donald Trump’s victory in the US presidential election, while renewable energy stocks fell.

Trump was declared the winner on Wednesday morning after securing the 270 electoral votes needed to take the presidency.

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ECB cuts interest rates to support flagging eurozone economy

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Fall in inflation enables central bank to bring in quarter point cut to 3.25% after business and consumer slowdown

The European Central Bank has intervened to prevent a sharp slowdown in the eurozone economy with its first back-to-back interest rate cut since the euro crisis in 2011.

With Germany on the brink of a recession and inflation tumbling across the 20 member single currency bloc, the ECB followed a reduction in the cost of borrowing at its previous meeting in September with a further 0.25 percentage point cut in its key deposit rate to 3.25%.

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French stock market swings to gain after election surprise; Britvic agrees to improved Carlsberg offer – business live

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Live coverage of business, economics and markets after New Popular Front is largest party in second round of France’s election, with far-right third

The French election has meant that Marine Le Pen’s far-right National Rally (RN) will not be in power, but it has not settled what France’s new government will look like.

The New Popular Front (NFP), the hastily arranged coalition of left-wing parties, won the most seats, but it is far short of a parliamentary majority. The result will mean a lot of negotiation to agree on who will be the new prime minister – let alone on achieving anything meaningful in governing the country.

The French parliament is more divided than ever, made up mainly of three blocs (Left – 182 seats, Centre – 168 seats, Extreme Right – 143 seats) and a number of smaller ones. As we predicted before the elections, no bloc can claim an absolute majority.

Minority government

French political parties “are not used to making concessions in order to create a programme around a coalition with other parties”, and the NFP’s most prominent figure, Jean-Luc Mélenchon demanded its entire programme be implemented. “If political parties maintain such positions, a long period of instability will ensue,” said Ledent.

Learning to cooperate

“Excluding the 80 MPs from the far left and the 145 from the far right, there are over 350 MPs left to form a broad coalition ready to reform France, taking into account the diversity of opinions. In other European countries, including Germany, such a configuration would be quite natural and would result in a government with a clear majority.

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Eurozone sinks into recession as cost of living crisis takes toll

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GDP shrank 0.1% in first quarter of 2023 and final three months of 2022 after revisions to earlier estimates

The eurozone slipped into recession in the first three months of the year, after official figures were revised to show the bloc’s economy shrank as the rising cost of living weighed on consumer spending.

Figures from Eurostat, the EU’s statistical agency, showed gross domestic product (GDP) fell by 0.1% in the first quarter of 2023 and the final three months of 2022 after revisions to earlier estimates. A technical recession is generally defined as two consecutive quarters of negative growth.

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Why is the euro doing so badly against the dollar?

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Analysis: Investors often turn to US currency in times of uncertainty and there are plenty of reasons for them to be jittery

It is two decades since the euro was last trading below $1.00 (£0.84) against the US dollar. Now the single currency is once again teetering on the brink of parity.

There are a host of reasons why, although the prompt for the most recent slide in the currency has been the fear Europe faces an energy crunch this winter.

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Euro a whisker from dollar parity; Heathrow caps passenger numbers amid travel disruption – as it happened

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Euro slides to a 20-year low of $1.0001 on anxiety that Europe will fall into recession, as Heathrow introduces limit on summer holiday passengers

The euro is teetering ever closer to parity with the dollar.

It’s now trading at just $1.0005, on concerns that the shutdown of the Nord Stream 1 gas pipeline for maintenance could become permanent.

“While we believe that a cessation of Russian gas supply to Europe is a real possibility, one that would cause a Eurozone-wide recession with three consecutive quarters of economic contraction, there are also good reasons to assume that gas supplies will resume after the maintenance.”

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European stock markets tumble on rising fears of recession

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Euro slumps to 20-year low against US dollar as jump in natural gas prices intensifies economic strain

Rising worries about a European recession hit stock markets on Tuesday as the euro slumped to a two-decade low and the pound fell to its lowest since the start of the pandemic.

Shares tumbled in London and across Europe as a jump in natural gas prices intensified the strain on the European economy.

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Russian central bank buys up roubles to avert stock market collapse

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Bank scrambles to prevent invasion of Ukraine sending Russia’s financial system into meltdown as currency hits all-time low

The Russian central bank has purchased millions of roubles to prevent the collapse of the Moscow stock exchange and prop up the currency after it plunged to an all-time low of 89.60 against the dollar.

In a scramble to prevent the invasion of Ukraine pushing Russia’s financial system into meltdown, officials in Moscow closed the stock exchange while the Bank of Russia mounted a rescue operation to put a floor under the skidding rouble.

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Hope and fear in EU as hardliner tipped to be German finance minister

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Prospect of the FDP’s Christian Lindner taking charge has ‘half of Europe quaking in its boots’

Germany’s biggest neighbours are watching the formation of the country’s new government with a mixture of hope and fear, amid concerns that a fiscal hardliner hotly tipped to become the next finance minister could drag the continent back to the frosty standoffs of the eurozone crisis.

The Social Democratic party (SPD), the German Greens and the Free Democratic party (FDP) were expected to inch further towards a “traffic light” power-sharing deal on Friday, with formal coalition talks likely to start next week.

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Moving on: why the EU is not missing Britain that much

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On the 5th anniversary of Brexit, commentators reflect on the EU’s success at rallying together after Britain’s exit

On the night of 23 June 2016 a storm broke out over Brussels. Rain poured, thunder rolled and lightning flashed over the headquarters of the European Union’s institutions.

Then in the small hours came a political thunderbolt almost no one had forecast: the UK had voted to leave the union. Five years on, the Brexit tempest has subsided – in Brussels, if not in London.

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Sterling reaches $1.39 in best performance for three years

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FTSE 100 posts biggest daily gain for over a month as investors buoyed up by vaccine and US economy hopes

The pound has hit its highest level against the dollar for almost three years as global markets were buoyed up by hopes for a faster economic recovery from the coronavirus pandemic.

Sterling rose by 0.5% to hit a 33-month high against the dollar on Monday, trading above $1.39 on the global currency markets for the first time since 2018, while also rising to a nine-month high against the euro of almost €1.15.

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Mario Draghi sworn in as prime minister of Italy

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Former European Central Bank chief to lead unity government as it tackles Covid and economic slump

The former European Central Bank chief Mario Draghi has been sworn in as Italy’s prime minister at the head of a unity government called on to confront the coronavirus crisis and economic slump.

Draghi, a respected figure at home and internationally, managed to convince almost all of the country’s main parties to support his government, with leaders from the far-right League and populist Five Star Movement (M5S) adopting more moderate, pro-European tones in recent days.

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Enter the Draghi: can ‘Super Mario’ save Italy as he did the euro?

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Called on to lead Italy’s government in crisis, the former central banker will need all the skills he honed saving the European currency

“Whatever it takes.” Three simple words that tamed the financial markets, saved the euro from possible collapse and turned Mario Draghi from an Italian technocrat into the central banker of his generation.

And an obvious choice to head a new coalition government in Rome at a time when the country is facing the triple whammy of Covid-19, economic collapse and political chaos.

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Margaret Thatcher said plan for the euro was ‘a rush of blood’, archives reveal

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The then British PM told her Irish counterpart that the bureaucracy in Brussels was a ‘politburo’ and was tying the UK up in regulations, papers show

Margaret Thatcher branded the European commission’s plans for a single currency as a “rush of blood to the head”, according to 30-year-old documents released from the Irish government archives.

In an echo of the divisive political debate that ultimately led to Brexit, the then British prime minister hit out at the “politburo” in Brussels and vowed not to be dictated to, during talks with her then Irish counterpart.

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Forget doom-laden headlines, the dollar has not gone into terminal decline | Barry Eichengreen

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Too much is being read into the greenback’s recent weakening against the euro

The dollar is in freefall! The global greenback is doomed! screamed recent headlines. Actually, such sensational headlines are “too sensational”, to echo that noted authority on currencies, Miss Prism, in Oscar Wilde’s The Importance of Being Earnest.

The dollar’s fall in July to a two-year low against the euro was the immediate impetus for these stories. In fact, the dollar’s recent slide is one in a series of readily explicable fluctuations. When the Covid-19 pandemic went global in March, the dollar strengthened on the back of safe-haven flows into US Treasuries, as it does at the start of every crisis. By May, the Federal Reserve, acting as global lender of last resort, had accommodated this mad scramble for dollars by pouring buckets of liquidity into financial markets and the greenback gave back its early gains.

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Eurozone downturn and US jobless surge hit markets – business live

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The euro area is suffering its worst contraction ever, as the French economy suffers its biggest plunge since the second world war

Britain’s FTSE 100 has just posted its worst day in a month, at the end of its best month in two years.

The blue-chip index has closed down 214 points at 5901, a drop of 3.5%. That wipes out yesterday’s rally, and half of Wednesday’s gains too!

Related: Shell cuts dividend for first time since 1945 amid oil price collapse

Shares in Zoom have dropped over 6% today, after the video-conferencing services admitted it wasn’t quite as popular as thought...

Zoom had initially said it had 300 million daily users, following the surge in remote working. But, it actually has 300 million daily meeting participants.

Zoom shares dropped more than 7% after the company walked back on claims it has 300 million daily active users. $ZM actually reached 300m daily participants, the difference being that meeting participants can be counted more than once.https://t.co/UIVYBP9sqt

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