The Euro to Australian Dollar (EUR/AUD) has made a minimal rise on 19th April, as EU leaders meet to discuss sweeping reforms.
French President Emmanuel Macron and German Chancellor Angela Merkel are both meeting to discuss Eurozone economic changes.
The jury is out on whether Mrs Merkel will be able to agree to Mr Macron’s ambitious plans, but for now the action itself has supported the Euro.
The proposals are primarily aimed at increasing economic security, though the creation of safety nets such as a common Eurozone budget.
(First published 18th April, 2018)
Hopes for Upgraded Eurozone Inflation Rate Readings Push EUR/AUD Exchange Rate Higher
The Euro to Australian Dollar (EUR/AUD) exchange rate has seen a small advance on the morning of 18th April, ahead of potentially greater gains in the pairing.
The main driver for the latest Euro (EUR) advance has been speculation that upcoming Eurozone inflation rate data will show an upgrade for March’s readings.
There has been little high-impact domestic data to refer to so far today – the only notable ecostats have concerned industrial activity readings for Italy.
Levels of sales and orders in the industrial sector have fallen during February, for both the month-on-month and year-on-year readings.
Australian Dollar to Euro (AUD/EUR) Exchange Rate Slides as Economic Index Declines
The Australian Dollar (AUD) has made a minor loss against the Euro (EUR) today, following the release of the Westpac leading index for March.
This measure of national economic health has shown a decline from 0.4% growth in February to a -0.2% decline over the previous month.
Commenting on the falling data, Westpac Research Analyst Bill Evans said;
‘Drivers of the slowdown in the month have been from domestic components – a slowing labour market; and some weakness in housing while rising short term interest rates have reflected liquidity pressures from global markets.
‘It appears likely that the Reserve Bank [of Australia] will lower its upbeat 3.25% growth forecast for 2018’.
Euro to Australian Dollar Exchange Rate Forecast: Will Higher Eurozone Inflation Trigger EUR/AUD Rally?
The Euro (EUR) could see a sustained advance against the Australian Dollar (AUD) in the near-future, when finalised Eurozone inflation stats for March will come out.
Both the month-on-month and year-on-year inflation rate readings are predicted to show growth, which could prompt a EUR/AUD exchange rate rise.
Although levels of inflation are not expected to reach the European Central Bank’s (ECB) 2% target, a rise closer to the 2% range could still boost the Euro.
Less positively predicted is the Eurozone construction output reading for February, which is anticipated to show a year-on-year slowdown from 3.7% to 2.3%.
For Australian Dollar traders, the next economic data to watch out for will be 19th April’s unemployment rate data for March.
The jobless rate is expected to have fallen in March, which could lead to an Australian Dollar to Euro (AUD/EUR) exchange rate rise.
A lower unemployment rate raises the chance of Australian workers seeing wage growth, which could force the Reserve Bank of Australia (RBA) to act.
If it looks like the AU unemployment data will raise the odds of tighter monetary policy, then the EUR/AUD exchange rate could close trading in a worse position.