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Euro Advances against Australian Dollar as AU Economic Outlook Dims

The Euro has made moderate gains against the Australian Dollar today, but remains vulnerable to pressure from Friday’s PMI figures.

  • EUR AUD rate rises to 1.4740 – AUD EUR trades down at 0.6783
  • Euro advances on Dutch confidence score – Spanish data offers further support.
  • AUD dips on lower growth estimates – Falling commodity prices blamed
  • Further Euro gains possible on confidence flash – Euro may remain dominant in pairing due to limited AU data

The Euro’s rise to 1.4740 against the Australian Dollar makes it a weekly best, but still a worse result than June’s high of 1.5217.

EUR AUD Exchange Rate Rises on Dutch Confidence

While Eurozone data has been thin on the ground, the Euro has still been supported by June’s Dutch consumer confidence score.

This index, measuring the perceived stability of the Dutch economy, has remained steady at 23 points instead of dipping as some had forecast.

On a relatively quiet day, other Eurozone news has seen annual Spanish industrial production slow in April. At 9.5%, however, the sector is still growing strongly.

Australian Dollar Declines after Westpac Index shows Lower Expectations

The Australian Dollar has been weakened by the result of the Westpac leading index. The index, which measures the predicted level of future economic growth, slowed from 1.01% in April to 0.62% in May.

Westpac Senior Economist Matthew Hassan analysed the data, stating that;

‘The shift mainly reflects a less supportive backdrop for Australia’s commodity prices and in global financial markets. After surging 44% between June and February, Australia’s commodity prices have declined by -10% over the last three months. The turnaround has taken 1.17% off the Leading index growth rate since the end of 2016’.

Euro could Rise Further on Upcoming Eurozone Confidence Flash

The next notable Eurozone data will be Thursday’s European Central Bank (ECB) economic bulletin. This will be followed by a Eurozone consumer confidence flash for June.

The bulletin summarises current conditions in the Eurozone, as well as providing an outlook on future economic movement. If growth is forecast, then the Euro could steadily appreciate against the Australian Dollar.

The latter confidence flash is only a preliminary estimate, but forecasts are for an index improvement from -3.3 points to -3. The Euro may advance if both of Thursday’s announcements are positive, but further ahead, losses may come from Friday’s pessimistically-predicted PMI figures.

From Australia, the next high-impact data isn’t due until the coming week. June 29th will bring HIA new home sales figures, while June 30th will see private sector credit scores announced.

Falling home sales could indicate a cooling of the Australian housing market, which will lower fears of a bubble developing.

Current Interbank EUR AUD Exchange Rates

At the time of writing, the Euro to Australian Dollar (EUR AUD) exchange rate was trading at 1.4740 and the Australian Dollar to Euro (AUD EUR) exchange rate was trading at 0.6783.