Euro Australian Dollar (EUR/AUD) Exchange Rate Falls as Trump Threatens Additional Tariffs
The Euro Australian Dollar (EUR/AUD) exchange rate slipped and the pairing is currently trading at an inter-bank rate of AU$1.6273.
On Wednesday, US Treasury Secretary Steven Mnuchin said the US-China trade deal was 90% complete.
This likely caused an upswing in risk appetite, buoying the ‘Aussie’.
Speaking to CNBC on Wednesday, Mnuchin stated:
‘We were about 90% of the way there [with a deal] and I think there’s a path to complete this.’
However, US President Donald Trump threatened imposing further tariffs on Chinese imports if he didn’t reach a trade deal with Chinese leader Xi Jinping.
In an interview with Fox Business Network the President stated:
‘I would do additional tariffs, very substantial additional tariffs, if that doesn’t work, if we don’t make a deal.’
He also left open the possibility that the Trump-Xi meeting at the G20 summit could lead to a deal to avert further tariffs.
Euro (EUR) Falls on Disappointing German Consumer Confidence
On Wednesday morning, data revealed that German consumer morale slumped in July.
The GfK consumer sentiment indicator fell for the second consecutive month, from 10.1 in June to 9.8 in July.
The German economy has been facing headwinds from Brexit uncertainties, trade tensions and a slowing world economy.
The survey revealed that consumer confidence has been shaken due to concerns that German carmakers could cut thousands of jobs.
However, consumers continued to spend as shoppers seemed to not worry about growing doubts about job security.
In a statement, GfK said:
‘Whether this will remain the case depends heavily on how income prospects develop in the coming months.
‘If the significant loss suffered by this indicator in June turns into a persistent downward trend, it will also be tough for propensity to buy to maintain its currently excellent level.’
Euro Australian Dollar Outlook: Will Disappointing Eurozone Business Climate Weigh on EUR?
Looking ahead to Thursday, the Euro (EUR) may fall against the Australian Dollar (AUD) following the release of the Eurozone’s business climate indicator.
If data shows that business climate deteriorates in June, the Euro could slump.
Meanwhile, the single currency could slump following the release of the flash German Harmonized Index of Consumer Prices.
If German consumer prices do not rise as high as forecast, it could cause the Euro Australian Dollar (EUR/AUD) exchange rate to fall.