A string of disappointing data releases have triggered a Euro to Australian Dollar slide today, which has only been worsened by positive Australian economic news.
- EUR AUD rate down to 1.4892 – AUD EUR trades up at 0.6712
- Euro drops on poor PMI results – Retail sales slow in July
- Australian Dollar advances after RBA meeting – Policymakers forecast higher growth ahead
- Is further Euro weakness ahead on retail PMI? – Further AUD advance possible on GDP stats
Trading around 1.4890 today, this has been a poor performance for the Euro, down from the high of 1.4986 seen yesterday and the peak of 1.5162 seen in August.
Euro Traders Disappointed by Sliding Sales Figures
All three of today’s main Eurozone announcements have disappointed, leading to the Euro declining significantly against the Australian Dollar.
Opening off the data stream, the finalised services PMI for August has shown a greater-than-expected slowdown in activity.
This was accompanied by the finalised composite PMI for the same month, which remained static instead of rising as forecast.
Rounding off this spread of Euro-negative news, annual Eurozone retail sales slowed in July while monthly sales dropped by -0.3%.
Australian Dollar Surges on RBA Results
The Australian Dollar has been the clearly dominant currency today, having been supported by an optimistic outlook from the Reserve Bank of Australia (RBA).
At its September interest rate meeting, the RBA left rates on hold as expected. More notable were RBA expectations for higher growth in the future. In the words of RBA Governor Philip Lowe;
‘The recent data [has] been consistent with the Bank’s expectation that growth in the Australian economy will gradually pick up over the coming year’.
Giving a positive summary of the meeting was Michael Blythe, Chief Economist of the Commonwealth Bank of Australia (CBA). Blythe said that while Lowe was less active than his predecessors, it was ‘Not that the lack of activity is a negative’.
In spite of Lowe’s outlook, many economists still believe that the RBA will leave interest rates on hold until 2018.
EUR AUD Outlook: Further Losses Possible on Higher Australian GDP
The recent Euro to Australian Dollar weakness may persist in the near-term, when Wednesday brings a measure of Eurozone retail activity as well as Australian GDP figures.
Eurozone retail activity is projected to have declined in August, while Australian GDP is tipped to have grown slightly in the second quarter.
Current Interbank EUR AUD Exchange Rates
At the time of writing, the Euro to Australian Dollar (EUR AUD) exchange rate was trading at 1.4892 and the Australian Dollar to Euro (AUD EUR) exchange rate was trading at 0.6713.