The Australian Dollar to Euro (AUD/EUR) exchange rate was trending 0.34% higher on Friday as risk aversion tapered off and the Eurozone’s only economic news for the day failed to impress.
Overnight the Australian Dollar initially fell against several of its rivals as investors turned from riskier currencies in the wake of a tragic and potentially disastrous development in the conflict between Russia and Ukraine.
However, after exhibiting some weakness, the Australian Dollar eased higher against peers like the Pound.
While there were no notable Australian economic reports due out last night, the ‘Aussie’ was supported by data from China.
Although one report did detail a steep decline in China’s new-home prices, another yielded positive results.
The Asian nation’s MNI July Business Indicator climbed from 55 to 58.2.
This was the highest sentiment reading for seven months and was reflective of the fact that industries are behind the government’s attempts to bolster economic growth. MNI economist Philip Uglow stated; ‘The Chinese authorities seem intent on not letting GDP lose too much ground whilst at the same time recognising that they need to maintain financial stability and deal with overcapacity in certain industries. It’s a difficult balancing act, although one that will be made slightly easier should growth in the US and global economy as a whole continue to recover as we expect.’
As China is Australia’s main trading partner, this sign of the nation’s improving outlook was ‘Aussie’ supportive.
The Australian Dollar to Euro (AUD/EUR) exchange rate extended gains during the European session as the Eurozone published Current Account figures for May.
The currency bloc still posted a current account surplus in May but it was notably narrower than the surplus recorded in April.
The Eurozone’s current account surplus stood at 21.6 billion Euros in April and flopped to 19.5 billion Euros in May. The trade goods surplus tumbled from 16.9 to 13.8 billion Euros.
The Australian Dollar to Euro exchange rate hit a high of 0.6941 after the figures were released.
The Euro was also weaker against the US Dollar but held steady against the Pound.
Next week some of the big driving factors in the AUD/EUR pairing will be Australia’s Consumer Price Index, the Eurozone’ Consumer Confidence figures, China’s HSBC Manufacturing PMI for July, Eurozone Markit Manufacturing/Services PMI, German IFO Business Climate figures and the GfK Consumer Confidence survey for Germany.
If the Eurozone’s reports add to the case in favour of the European Central Bank introducing quantitative easing style stimulus in the near future, the Australian Dollar to Euro exchange rate could rally.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.5574,