Towards the end of Friday’s European session, the Euro to Australian Dollar (EUR/AUD) exchange rate was trending within the region of 1.3722.
After Athens deferred on the €300 million International Monetary Fund (IMF) payment, the single currency had a mini surge. This is likely to be due to the fact that by bundling all June’s payments into one payment at the end of the month, there is a reduction in uncertainty volatility on several payments. With this in mind, it is possible that domestic data will play a larger part in Euro movement over the coming week.
US Dollar movement will play a key role in Australian Dollar volatility over the coming month. Despite geopolitical tensions in Europe, market sentiment strengthened significantly on Friday. This was due to the IMF urging the Federal Reserve to avoid hiking the benchmark interest rate until 2016. If US data prints poorly, the ‘Aussie’ (AUD) is likely to rally.
Euro (EUR) Exchange Rate Forecast to Fluctuate against the ‘Aussie’ on Sparse Economic Docket
As explained above, Greece’s decision to bundle all June’s loan payments into one single payment could see less volatility from uncertainty which surrounds loan payment dates. Should this be the case, domestic data is likely to play a larger part in common currency movement over the coming week. With that being said, any developments between Greece and the Eurogroup are likely to dominate trader focus. Additionally, the relatively sparse European economic calendar may see movement dictated by changes in the wider currency market.
For those invested in the single currency; German Industrial Production, German Trade Balance, Eurozone Investor Confidence and Eurozone Industrial Production will be of interest.
Australian Dollar (AUD) Exchange Rate Forecast to Fluctuate versus the Shared Currency on Market Sentiment
With US Dollar volatility, changes in the commodities market and geopolitical tensions in Europe, market sentiment has seen dramatic fluctuations of late. Therefore, the ‘Aussie’ is likely to see heightened movement with market sentiment ever changing.
There will, however, be several domestic data publications with the potential to provoke ‘Aussie’ volatility. In particular, Thursday’s Employment Change and Unemployment Rate hold a lot of weighting in terms of the provocation of Australian Dollar movement. Home Loans, Investment Lending, Consumer Inflation Expectation and Full Time Employment Change will also be of interest to those invested in the South Pacific currency.
Data out of China may also impact upon the Oceanic currency. Trade Balance, Consumer Price Index, New Yuan Loans, Retail Sales, Industrial Production and Fixed Assets Ex Rural publications have the potential to impact upon the Australian Dollar.
In addition to the data already mentioned, the Australian Dollar is likely to fluctuate in response to US data. A Stronger US Dollar sees risk-appetite cool which weighs on the risk-correlated Australian Dollar.
Of all the US Data worth watching, University of Michigan Confidence and Advance Retail Sales have the most weighting in terms of provoking market fluctuations.
If Greek Prime Minister Alexis Tsipras opts to seek help from elsewhere, Russia being the prime target, the single currency will dive versus its competitors.
The Euro to Australian Dollar (EUR/AUD) exchange rate was trending within the range of 1.4497 – 1.4681 during Friday’s European session.
