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EUR/AUD Exchange Rate Forecast to Decline after Eurozone Industrial Production Unexpectedly Contracts

Euro to Australian Dollar (EUR/AUD) Conversion Rate Predicted to Soften on Profit Taking

The Euro to Australian Dollar (EUR/AUD) exchange rate softened by around -0.4% on Friday afternoon.

After the Euro rallied versus its major peers yesterday the sharp appreciation opened up attractive selling opportunities. This caused the single currency to depreciate during Friday’s European session as traders locked in profits. Aiding the depreciation today was mixed results from domestic data erring towards negativity. Whilst German annual Gross Domestic Product advanced by 2.1% in the fourth-quarter, it failed to meet with expected growth of 2.3%. What’s more, the working day adjusted reading showed fourth-quarter German GDP at 1.3% which was below the market consensus of 1.4% growth. Adding to the disappointing data news today was December’s Eurozone Industrial Production which contracted on both a monthly and an annual basis.

In response to the Eurozone Industrial Production data Europe’s statistics office, Eurostat, stated; ‘The decrease of 1.0% in industrial production in the Euro area in December 2015, compared with November 2015, is due to production of energy falling by 2.4%, capital goods by 1.9% and both intermediate goods and non-durable consumer goods by 0.3%, while production of durable consumer goods rose by 1.4%.’

The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.5825.

Australian Dollar to Euro (AUD/EUR) Conversion Rate Predicted to Edge Higher even after Australian Home Loans Miss Estimates

Despite the fact that high-yield demand has improved in response to the easing global stocks rout amid rising crude prices, the antipodean assets have extended losses versus major peers. The lack of demand for the ‘Aussie’ (AUD) can be linked to a combination of falling gold prices and disappointing domestic data. December’s Home Loans was forecast to advance by 3.0% but the actual result only showed 2.6% growth.

Kunal Shah, head of research, Nirmal Bang Commodities advises investors to stay with gold in the present market scenario. ‘My outlook on gold is still bullish despite a rise of Rs 5,000 in the recent past. I recommend investors to stay invested in gold in the current economic environment. Asset like gold has very high intrinsic value and hence if you will not get 10-15 per cent from here but the metal will preserve your wealth if some major damages will happen in the global economy. I believe gold can test Rs 32,500-33,000 per 10 gram by the end of December 2015,’ he said.

The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low of 1.5799 during Friday’s European session.

Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast: US Data to Provoke Volatility

Given that both the Euro and the Australian Dollar are impacted by US Dollar movement, today’s significant US data should provoke changes for the Euro to Australian Dollar (EUR/AUD) exchange rate. Both January’s Advance Retail Sales and February’s University of Michigan Confidence Reports therefore, will be closely watched by investors.

Market sentiment, crude oil prices, commodity values and stocks market volatility will also all have an impact on EUR/AUD exchange rate movement.

The Euro to Australian Dollar (EUR/AUD) exchange rate climbed to a high of 1.5964 during Friday’s European session.