EUR/AUD Stable as Eurozone Growth Remains on Target
The Euro Australian Dollar (EUR/AUD) exchange rate is trading in a narrow range today as the Eurozone publishes its latest GDP estimate.
At the time of writing EUR/AUD is still close to its opening levels today, with the pairing having fallen back around half a cent from Tuesday’s best levels.
Euro (EUR) Steadying Following GDP Figures
The Eurozone is stable this morning as the Eurozone published its latest GDP estimate for the fourth quarter.
According to data released by the EU statistics office, Eurostat, the latest estimate confirmed the preliminary reading that the bloc expanded as a healthy 0.6% at the end of last year.
The data also continued to show that the Eurozone economy grew at a blistering pace last year, with GDP rising to 2.5% in 2017, the bloc’s best rate of growth in a decade.
The big question now will be whether the Eurozone can maintain its momentum and mirror last year’s spectacular performance in 2018.
Bert Colijn, economist at ING Bank suggests that recent industrial data is a good indicator that the Eurozone will continue to see strong growth in 2018;
‘Eurozone industry is a good example of a sector with still has a lot of upside left… Given the current backlog of work in industry, it is no surprise that hiring and investment in capital goods are high on the list of businesses.
This adds to the strong economic picture for the start of 2018.’
Australian Dollar (AUD) Muted Following Slide in Consumer Sentiment
Meanwhile the Australian Dollar remained subdued in trade against the Euro on Wednesday following the release of Australia’s latest consumer confidence report.
Accorded to the Westpac-Melbourne Institute’s latest survey, household sentiment has fallen in February, with the confidence index sliding from a four-year high of 105.1 to 102.7.
However despite the slide, the index was able to hold above the 100 point mark, suggesting that consumers are still more optimistic than pessimistic in their outlook.
The main factor behind the fall in sentiment appeared to be the sharp fall in stock prices, which took place at the same time as the survey.
Bill Evans, chief economist at Westpac said;
‘The survey was conducted over the week of February 5 – February 11. That week was marked by a wave of volatility in global share markets.
Extensive media coverage of these developments would have unnerved respondents on two fronts – the impact on their own financial position and concerns for general global stability.’
EUR/AUD Forecast: Australian Employment Growth Expected to Slow
Looking ahead, movement in the EUR/AUD exchange rate on Thursday is likely to be driven by the release of Australia’s latest labour report at the start of the Asian session.
Economists forecast that the report will reveal that the domestic jobless rate held at 5.5% in January, with a slowing in employment growth possibly denting the appeal of the Australian Dollar.
Meanwhile France will also publish its latest employment figures tomorrow, with the Euro possibility weakening if the unemployment rate failed to improve in the fourth quarter last year.