The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending around 1.4366, ebbing between a low of 1.4349 and a high of 1.4425. Movement at this time is around -0.34% which is likely to be due to the effect of poor European domestic data.
Yesterday was not ideal in terms of European economic standing and the strength of the single currency. A succession of poor results from the ZEW surveys for economic sentiment weighed heavily on the Euro. The German ZEW Survey for Economic Sentiment caused the most damage given that Germany is the most influential nation in the 18-country bloc. It posted a dramatic fall from the forecast figure of 17.0 to 8.6.
With very few influential domestic data releases on the cards, the Australian Dollar continued on a downward trend as investors sought less risky currencies in the wake of increasing geopolitical tensions. A positive NAB Business Confidence Report had little influence over movement.
From a European economic standpoint today’s initial domestic data releases went some way in terms of damage limitation. The final year-on-year German Consumer Price Index for July met with the previously forecast figure of 0.8%. However European celebrations were short lived; unimpressive Eurozone industrial production threw a spanner in the works. Year-on-year Eurozone Industrial Production was forecast to drop from 0.6% to 0.2%. The actual data resulted in a stagnation of 0.0%.
As an emerging market currency the ‘Aussie’ (AUD) has suffered from geopolitical unrest of late. To add fuel to an increasingly volatile fire; today’s Chinese domestic data releases stoked growing concern over the strength of the Australian economy, and the ‘Aussie’ has fallen as a result.
Year-on-year Chinese Industrial Production dipped from the forecast figure of 9.2% to 9%. Also year-on-year Chinese Retail Sales dropped from 12.5% to 12.2%.
The Euro to Australian Dollar exchange rate has hit a low today of 1.4349.
The Pound Sterling to Australian Dollar exchange rate also fell and according to Ollie Carpenter of Future Currency Forecast, the UK’s unimpressive employment data was to blame. He stated; ‘The UK was shown to have added less positions than anticipated in the three months to June and although the nation’s unemployment rate did decline in accordance with expectations, average weekly earnings including bonuses dropped by 0.2% in the three months to June, a greater decline than expected. Similarly, weekly earnings excluding bonuses rose by just 0.6%, trailing the rate of inflation by quite a considerable margin.’
Euro to Australian Dollar Forecast
Tomorrow is an extremely influential day for the Euro with several important European domestic data reports to be released.
German Gross Domestic Product (GDP) will have a marked impact on European economic standing. It is forecast to drop from the previous figure of 2.5% to 1.3%. Investors will hope for a better-than-forecast result to bolster the Euro. Another extremely influential data release will be the Eurozone Gross Domestic Product Report. There is no forecast figure from the previous 0.9%.
Euro investors will also want to watch tomorrows ECB Monthly Report and the Eurozone Consumer Price Index.
Look towards geopolitical change to affect movement for the ‘Aussie’ as there is no significant domestic data pertaining to either Australia or China.
The Euro to Australian Dollar exchange rate has hit a high today of 1.4425.
