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EUR/AUD Advances on ECB Stress Tests

The Euro to Australian Dollar (EUR/AUD) exchange rate has advanced by around 0.16% on Monday. This can be attributed to improved sentiment towards the common currency after the European Central Bank stress tests showed fewer issues in Eurozone banks than was originally forecast. An absence of Australian data has seen the South Pacific asset decline against many of its most traded currency competitors.

The Euro to Australian Dollar exchange rate is currently trending in the region of 1.4445.

Over the past few weeks the common currency has generally slumped against its major peers, irrespective of domestic data results. This was due to economists making bets that the ECB health checks on Eurozone lenders would produce unpleasant results.

After geopolitical tensions eased a little, at least in terms of its domination over trader focus, the ‘Aussie’ (AUD) enjoyed a surging run against many of its currency rivals. Improving Australian economic data has also aided an uptrend for the South Pacific asset.

The Euro to Australian Dollar exchange rate has dropped to a low today of 1.4372.

On Monday the single currency advanced a little after the ECB stress tests produced better-than-expected results. Although 25 of the Eurozone’s 130 banks failed the health checks, most of these banks had already made great strides towards rectifying the issues. ‘There are some positives from the stress tests and it could have been a whole lot worse,’ said Neil Mellor, a currency strategist at Bank of New York Mellon in London.

However, the common currency was dragged back down after domestic data from the currency bloc’s most powerful economy disappointed. German Business Climate was forecast to drop from 104.7 to 104.5, but the actual result declined to 103.2. German Current Assessment fell beyond the market consensus of a drop from 110.5 to 110.0, with the actual result dropping to 108.4. German Expectations came in at 98.3, below the median market forecast of 99.2 and lower than the previous figure of 99.3.

A complete absence of Australian data has seen the ‘Aussie’ generally soften as Monday progressed. Further declination may be as a result of BHP Billiton Ltd. (BHP) potentially selling Fayetteville shale assets in Arkansas. ‘We have initiated marketing our Fayetteville acreage,’ Chief Executive Officer Andrew Mackenzie said today in a statement. ‘We will only divest the field if it maximizes value for shareholders.’

Euro to Australian Dollar Forecast to Hold Steady

With very little by way of European economic data and a complete absence of Australian data on Tuesday, the EUR/AUD exchange rate is unlikely to be subject to intense volatility.

That being said, modest movement could be caused by Australia’s weekly Roy Morgan Consumer Confidence gauge and the German Import Price Index will be of note.

The Euro to Australian Dollar exchange rate has advanced to a high today of 1.4450.