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EUR AUD Exchange Rate Volatile as Uncertainty over the US Elections Causes Market Chaos

  • EUR AUD Volatile ahead of US Elections – Markets become risk adverse as political uncertainty grows.
  • Iron Ore Prices Climb – High Prices help alleviate pressure on Australian Dollar.
  • Eurozone Data Impresses – Euro strengthens as Eurozone unemployment remains at four-year low.
  • EUR AUD Rate Forecast – Eurozone set to release slew of PMI data tomorrow.

The EUR AUD exchange rate has become increasing volatile in the last couple of days as the increased political uncertainty of the US elections causes market jitters.

Euro Australian Dollar (EUR AUD) Unstable in the Run up to US Election

The Euro Australian Dollar (EUR AUD) exchange rate has witnessed notable fluctuations over the past few days due to growing political uncertainty in the run up to the US elections.

With less that a week to go before America votes for its next president the latest political polls have shown that the two candidates are nearly neck and neck.

After enjoying a substantial lead in the polls for much of October, Democratic presidential candidate Hillary Clinton has found the gap between her and Republican rival Donal Trump narrowing to just two points.

Clinton’s campaign has been under significant pressure over the last few days following the news that the FIB would be launching a new inquiry into her use of a private email server for official correspondence during her time as the US Secretary of State.

The US Dollar (USD) chaos that a possible Trump presidency has caused, has helped the Euro benefit from its positon as the second half of the most traded currency pairing in the world.

Meanwhile the Australian Dollar (AUD) has suffered as the uncertainty causes dovish investors to lose their risk appetite.

Australian Dollar (AUD) Holds as Iron Ore Prices remain high

The Australian Dollar has been able to limit the Euro’s advances thanks to recent surges in the price of iron ore, Australia’s largest export.

A fall in production as well as increased demand in China following the recent uptick in the Chinese economy has seen prices for iron ore rise 50% over the last year, with prices sitting at their highest levels since April.

However iron ore’s rally could be coming to an end after prices appeared to cool earlier today amid predictions that the commodity could plummet in the approach to 2017 as production begins to ramp up.

Should momentum for Australia’s key export slow, then it is likely that the commodity-correlated ‘Aussie’ will slide alongside it as market risk appetite wanes.

Euro Strengthened as Eurozone Unemployment Holds at Four-Year Low

The Euro has also been Bolstered by the release of the latest Eurozone unemployment report, which showed that figures remained at 10.0% in September, their lowest point in four-years, helping to boost confidence that the Eurozone is continuing to grow, albeit slowly.

Movement between EUR AUD was muted however as Australia’s performance of service index rose from 48.9 to 50.5 in October.

EUR AUD Exchange Rate Forecast: Flood of Eurozone PMIs to be released on Friday

Tomorrow will see the release of a slew of Eurozone PMIs for October, however with figures largely forecast to remain the same across the board it is unlikely to have a major impact on the Euro Australian Dollar exchange rate.

Meanwhile Australia will release its retail sales figures for September, which are predicted to hold at 0.4% – the best result for 2016. The data should help the ‘Aussie’ rebuff any advances from the Euro. However an unexpected drop could cause the Australian Dollar to tumble.

Current Interbank 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.