EUR/AUD Exchange Rate Flat as Eurozone Pessimism Grows
The Euro Australian Dollar (EUR/AUD) exchange rate remains muted this morning as markets react to the Eurozone’s latest economic sentiment survey.
At the time of writing the EUR/AUD exchange rate remains virtually unchanged from today’s opening levels, having recovered from a brief slide ahead of the European session.
Euro (EUR) Exchange Rate Weakened by Pessimistic Outlook from Eurozone Economists
The Euro (EUR) is struggling to find any ground against the Australian Dollar (AUD) this morning as economists are becoming increasingly gloomy in their outlook for the Eurozone.
The ZEW Economic Sentiment Index –a measure of optimism from a number of Eurozone economists- plummeted from -12.6 to -18.7 in July.
This saw sentiment falling a lot faster than the modest slide to -13.2 that had been forecast as well as resulting in the lowest reading since late 2012, in the midst of the Eurozone crisis.
It will likely come as no surprise that growing fears of a global trade war greatly diminished the economic outlook from economists this months, with observers fearing the German juggernaut could be felled if Trump seriously considers imposing tariffs on EU products as he has hinted.
Australian Dollar (AUD) Exchange Rate Stalls on Mixed Outlook from Businesses
Meanwhile the Australian Dollar’s (AUD) advance was slowed overnight on Monday as Australian business confidence came in below expectations in June.
According to data compiled and published by National Australia Bank (NAB), Australia’s business confidence index slid from 7 to 6 in June, falling below expectations it would jump to 8.
While the survey revealed businesses remained fairly upbeat regarding domestic growth and strong employment, it masked concerns about week inflationary pressures.
Alan Oster, Chief Economist at NAB, said:
‘The survey continues to suggest relatively robust growth in the economy but also suggests that broader inflationary pressures remain weak with slow rates of both purchase price and final products price inflation.’
EUR/AUD Exchange Rate Forecast: Will Slide in Australian Consumer Sentiment Drag on the ‘Aussie’?
Looking ahead, the EUR/AUD exchange rate may begin to rally overnight, with Australia’s latest consumer confidence reading expected to report household sentiment is falling.
Economists currently forecast the sentiment index may have fallen to 100 in July, putting the index at the point where pessimists are equally balanced by optimists.
Meanwhile a speech by European Central Bank (ECB) President, Mario Draghi may strengthen the Euro on Wednesday, should he continue to strike an upbeat tone regarding the Eurozone economy.