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UPDATE
The Euro to Australian Dollar (EUR/AUD) exchange rate softened by around -0.3% on Tuesday morning.
With mounting speculation that the European Central Bank (ECB) will look to ease policy within the next few months, demand for the shared currency dampened considerably. The single currency is currently holding steady versus most of its major peers as traders await September’s Eurozone Consumer Confidence data.
After Australian economic data produced better-than-anticipated results, the ‘Aussie’ (AUD) strengthened versus its major rivals. Weekly consumer Confidence rose significantly, and second-quarter House Prices bettered estimates. Aiding the Australian Dollar uptrend was the Shanghai Composite Index which ended the Asian session up for the second day in a row. This may indicate that China’s equity market is finally stabilising.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.5642.
Yesterday…
UR/AUD Conversion Rate Predicted to Surge after Tsipras Re-Elected Greek Prime Minster
The Euro to Australian Dollar (EUR/AUD) exchange rate strengthened by around 0.2% on Monday afternoon.
After Sunday’s Greek election saw Alexis Tsipras retain leadership, the single currency strengthened versus many of its peers. The appreciation is the result of easing tensions regarding the potential for a new Greek Prime Minister and a shift in policy. After such a long period of negotiations, the thought of the final deal being rejected by a new party was a bleak prospect for traders.
The electorate has voted to return to power a party that ‘ditched its promises, switched its policies, and caused the collapse of Greek banks, bringing in an unneeded recession,’ said Stathis Kalyvas, a professor of political science at Yale University. On the other hand, ‘this government will be called to implement a stringent set of fiscal and structural reforms that it vigorously rejected before,’ he said.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.5716.
AUD/EUR Exchange Rate Forecast to Decline despite China’s Equity Markets Ending Today’s Session Up
In spite of the fact that the Shanghai Composite Index ended the Asian session up, the ‘Aussie’ (AUD) declined versus its major peers. This is likely because the gains in China’s equity market were comparatively thin and prices remain well below previous values. The slight appreciation was linked to increased demand for speculative small-cap shares. ‘Investors seem to be favouring short-term trading in the IT sector with relatively frequent rallies and corrections,’ wrote Gerry Alfonso, director at Shenwan Hongyuan Securities.
The slowdown in China has had some significant ramifications for commodity prices. ANZ bank has been forced to cut iron ore and coal futures as demand for raw materials from China has slowed exponentially. Iron ore is Australia’s largest export so the long-term low prices forecast will be considerably detrimental to demand for the South Pacific asset. ‘In iron ore in particular we see little upside in prices for the next few years,’ Head of Commodity Research Mark Pervan wrote with analyst Anurag Soin. ‘Lower Chinese growth forecasts have prompted us to lower our steel-demand outlook.’
The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low of 1.5670 during Monday’s European session.
Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Hold Gains ahead of Australian House Price Index
Given the complete absence of further domestic data publications to provoke significant changes, the Euro to Australian Dollar (EUR/AUD) exchange rate is likely to hold gains for the remainder of Monday’s European session.
Tuesday is likely to see heightened EUR/AUD volatility with Australia’s House Price Index and Eurozone Consumer Confidence due for publication. Any news from China is also likely to impact on the pairing.
The Euro to Australian Dollar (EUR/AUD) exchange rate climbed to a high of 1.5807 during Monday’s European session.
