President Macron has suggested an EU bailout fund to be used during times of financial crisis, Angela Merkel is under pressure from her own Government as German taxpayers have concerns that an EU fund would put a lot of pressure on the Germany economy. This EU report looks at the ways this could affect the EU economy and the Euro; the below table shows the difference in Euros you could have achieved when buying £200,000.00 during the high and low points of the past 30 days.

Currency Pair% ChangeDifference on £200,000
GBPEUR2.04%€4,640 EUR
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Cracks appearing between Angela Merkel & Emmanuel Macron

At a meeting in Berlin yesterday, Chancellor Angela Merkel of Germany and French President Emmanuel Macron delivered a message that compromise is needed if the Eurozone is to be reformed this year. EU officials are trying to have a draft plan of how to reform the EU by the summit which is going to take place at the end of June. Emmanuel Macrons vision is to have a European bailout fund which is to be used when there is a financial crisis. He also believes the Eurozone should have its own independent finance minister. However Mrs Merkel is under pressure from her own Government as German tax payers are concerned that Macrons call for more solidarity and therefore a ‘bailout fund’ could cost the German economy.

Angela Merkel and Emmanuel Macron arguable are two of the most influential and important people within the Eurozone. In the upcoming weeks if Mrs Merkel has to favour her government over Macron and the EU this could cause a major problem for the Eurozone, which will be reflected in Euro exchange rates. For more information on this story feel free to contact the fall.

Will the ECB extend the QE program past 2018?

At present the ECB are running a quantitative easing program which injects €30bn into the European economy each month.  European economic data performed extremely well throughout 2017 and the central bank had been hinting that the QE program could come to an end by the end of the year. This is one of the reasons why over the last 18 months EURUSD has improved from 1.06 to 1.22.

A main reason why the ECB started the QE program in 2015, was because European inflation remained stagnant around 0%. This week European inflation dropped to 1.3% and has been on a steady decline since March 2017 when inflation was at 2%. With inflation falling and global events including trade wars, Brexit and now the EU reform debate between Merkel and Macron, I wouldn’t be surprised to see the QE program run past the end of the year which could put pressure on the single currency long term. All eyes will now turn to the ECB’s interest rate decision next Thursday for forward guidance.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.