- EUR AUD Exchange Rate Rises – Euro able to gain as USD pressure is lifted.
- AUD Weakened as Commodity Prices Fall – Australian Dollar in decline as iron ore prices slump.
- Euro Faces Potential Crisis – Italian referendum could cause more chaos in Eurozone.
The EUR AUD exchange rate climbed by around half a cent as the week’s trading opened today as demand for the Euro was bolstered by a decline in the US Dollar (USD).
Euro Australian Dollar (EUR AUD) Rises as US Dollar (USD) Weakened
The Euro Australian Dollar (EUR AUD) exchange rate rose this morning as demand for the single currency was boosted by a slump in the US Dollar.
USD’s recent rally following Donald Trump’s victory in the US elections appears to have come to an end this week as markets have shifted from speculating on his potential tax cuts and campaign infrastructure promises to focus on his building of a new cabinet over the weekend.
The shift allowed the Euro to advance against the ‘Aussie’ earlier today as markets sought an alternative to the ‘Greenback’.
Australian Dollar (AUD) Pressured by Iron Ore Slump
The Australian Dollar fell against the Euro today as it was weakened by a decline in commodity prices, partially in iron ore as prices fell over 18% from the high reached last Monday.
Iron ore soared in the first half of November, fuelled by speculation in Chinese futures and in anticipation of rising demand for new US infrastructure projects following Donald Trump’s surprise victory in the US elections.
However China’s move to rein in future trading caused prices to fall to $72.60 a tonne, which combined with a rise in investor risk aversion has led the AUD EUR exchange rate to tumble.
Italian Referendum Uncertainty Pressures Euro
An upcoming constitutional referendum in Italy is weighing on the Euro as some investors begin to worry about the impact that it will have on the Eurozone.
Italy’s current Prime Minister Matteo Renzi has vowed to resign should the referendum be unsuccessful, likely causing political chaos and possibly leading to a change in government.
The main concern is that the main opposition parties, both the Eurosceptic Five Star Movement and Silvio Berlusconi’s fiercely anti-euro Forza Italia party could cause Italy to abandon the EU if either of them ride the recent wave of in populism in Europe to form a new government.
This has added to fears that the entire Eurozone could collapse following ‘Brexit’ and increasing worries that Marine Le Pen’s National Front party could win the French general election after Trump defied the odds in the US presidential elections.
EUR AUD Exchange Rate Forecast: Eurozone PMIs to be released Wednesday
The EUR AUD exchange rate may drop on Wednesday with the release of a slew of Eurozone PMIs with Germany’s PMIs forecast to show a decline across the board.
Germany’s Manufacturing PMI report is expected to fall from 55.0 to 54.7, while the Services PMI is also predicted to fall from 54.2 to 54.0 in November, causing the Eurozone composite PMI to hold at 53.3.
However should the Eurozone data show any notable improvement over the forecast then the Euro could make significant gains against the Australian Dollar this week as, with only four low-impact Australian ecostats scheduled for the week, there will be little of data to counter.
Current Interbank EUR AUD Exchange Rates
At the time of writing the EUR AUD exchange rate was trending around 1.44 and the AUD EUR exchange rate was trending around 0.69.