The Euro Australian Dollar (EUR AUD) exchange rate rallied this morning as the Eurozone released some upbeat employment figures for the month of April.
According to the EU’s statistics agency Unemployment in the Eurozone fell from a downwardly revised 9.4% to 9.3% last month, beating forecasts that it would remain unchanged and, striking its best levels since March 2009.
The drop was helped by equally impressive employment figures from Germany, where the jobless rate continues to reach new lows thanks to strong economic growth, with Germany’s latest figures showing that unemployment fell to its lowest levels since reunification in May as it slid from 5.8% to 5.7%.
The drop in the Eurozone’s unemployment rate has picked up the pace in recent months, showing consistent growth after peaking at over 12% in 2013 at the height of the Eurozone debt crisis, with even countries such as Italy and France, which have historically struggled to boost employment levels showing strong improvements.
The uptick in employment also added further credibility to the suggestion that economic growth in the bloc will continue to strengthen over the coming months.
Analysts however remained concerned over disappointingly high youth unemployment as it sits at 18.7%, with over 2.6 million under 25’s still out of work.
The upbeat data helped EUR AUD shake off some of the recent fears over Greece, after media reports suggested that Athens could refuse its next round of bailout funding and default on a €7bn debt repayment in July.
While Greek officials were quick to dismiss the speculation it caused significant volatility in the single currency yesterday, especially as Eurozone finance ministers and the IMF are still yet to reach an agreement over possible debt relief for the beleaguered nation.
Meanwhile the Australian Dollar plummeted today as Chinese commodity traders returned with a vengeance after a public holiday on Monday.
Australia’s two largest exports, iron ore and coking coal both took a beating on the Dalian futures exchange in the Asian session, falling 5.98% and 8.97% respectively, with coal futures only prevented from falling further by the 9% closing limit placed on the exchange.
The ‘Aussie’ tumbled as investors predict that this could cause commodity markets to rout even further over the coming days.
Unusually the decline in Chinese futures comes despite recent data signalling that China’s economic growth has started to pick up strength again, with a robust manufacturing PMI in May suggesting that demand for raw commodities is likely to remain strong.
Looking ahead the EUR AUD exchange rate is likely to rise tomorrow if economists are correct and Germany’s Manufacturing PMI rose from 58.2 to 59.4 in May.
Meanwhile the Australian Dollar may recede even further on Thursday as Australia’s own Manufacturing index for May is expected to show a decline in activity, with analysts forecasting it will have slipped from 59.2.
Current Interbank Exchange Rates
At the time of writing the EUR AUD exchange rate was trending around 1.5057 and the AUD EUR exchange rate was trending around 0.6641.