EUR/AUD Exchange Rate Falls as Australian Manufacturing Improves
The Euro Australian Dollar (EUR/AUD) exchange rate fell today, leaving the pairing trading around AU$1.6119.
The Australian Dollar (AUD) rose against the Euro (EUR) following this morning’s publication of the Australian Commonwealth Bank Manufacturing PMI for July, which returned to growth at 51.6.
Innes Willox, a Chief Executive at Ai Group, commented:
‘Australian manufacturing edged back into growth in July as continued expansion of the food and beverages, chemicals, and building-related products sectors outweighed ongoing deterioration in activity in the metal products and textile[s].’
‘Aussie’ traders are, however, remaining jittery following the US-China trade talks, which were described as ‘construction’, but failed to conclude on any signs of a trade deal between the two superpowers.
Robert Carnell, an Economist at ING Asia, said:
‘The issues that are making these trade talks hard to conclude are not likely to be any less difficult in September. We are not holding out much hope of a breakthrough then either.’
EUR/AUD Exchange Rate Falls as German Manufacturing Sinks Deeper into Contraction
Meanwhile, the Euro fell following today’s German Markit Manufacturing PMI for July, which contracted at 43.2 despite the forecast slight improvement of 45.4.
Phil Smith, Principal Economist at IHS Markit, commented:
‘After displaying a broadly sideways tendency throughout the second quarter, the PMI tumbled in July to signal a level of weakness in the Germany manufacturing sector not seen for seven years.’
This has added to fears that the European Central Bank (ECB) could go ahead with stimulus measures in the near-term, with the Eurozone growth figures halving to 0.2% in the second-quarter yesterday and inflation falling well below the ECB’s 2% target.
Today also saw the French Manufacturing PMI for July fall into contraction from 50 to 49.7.
Ongoing concerns regarding the UK’s position on Brexit is also causing concern for Euro traders, as negotiations
EUR/AUD Outlook: Could the Euro Sink Further on Eurozone Economic Woes?
Australian Dollar (AUD) traders will be looking ahead to tomorrow’s HIA New Home Sales figures for June.
These will be followed by the Australian retail sales figures for June, which are expected to rise.
Euro investors, meanwhile, will be looking ahead to tomorrows’ Eurozone retail sales figures for June.
Any signs of improvement could prove Euro-positive.
The EUR/AUD exchange rate is likely to remain subdued as the Eurozone’s economic data is leaving market sentiment in the European currency running low as Brexit and the bloc’s manufacturing sector continues to take a downturn.